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BAL bellamy's australia limited

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AGM Attendance and Questions, page-65

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Alterego1168

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19/10/16

23:32

Post #: 19984961
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Originally posted by VivaLaVida ↑

I understand the desire for a Q1 update, but I don't understand the apparent backlash and criticism being vented.

BAL hasn't previously provided an update or forecasts at the AGM, nor gave any indication one would be made - so no breach or failure as far as I'm concerned.

They are still the same company that delivered increases of 342% EBIT, 95% Revenue and 331% China Revenue in FY16.

There were a lot of positives out of the meeting, which I've reiterated below.

I agree that reading the presentation and press releases in isolation makes it hard connect with all the positives this company has going. I'm glad I made the effort to get there!
With the level of info discussed at the meeting, I don't need any forecasts to workout this company is still in a growth phase and hasn't plateaued - but as always, DYOR.

- The significance of achieving #1 toddler milk and cereal in Australia and the leveraging this will bring:
- Consumer (China) preference for purchasing the best, and relying on recommendations of friends and families.
- BAL a priority Top 3 customer for manufacturers supplying China market (new Chinese regulations)
- #1 brand compelling reason for retailers to stock BAL (e.g. Woolies)
- #1 brand also compelling reason for suppliers to deal with BAL

- Continued consolidation and penetration of China market:
- China is bigger/equal to all other global markets combined.... >100k stores, BAL in approx 5,500 of them - growth opportunity is huge
- Stats starting to come through from relaxing one-child policy - last year 29% increase in birth rate
- New regulations will consolidate brands from >2000 to <250, this will support and build BAL growth in China
- BAL are on top of 11/11: targeted marketing and increased inventory to meet demand

- Board not resting on laurels:
- Increasing target for Australian penetration from 4,400 to 7,000 distribution points (59%)
- continue to nurture other markets, SEA, Singapore, Vietnam

- Increased organic milk supply has enabled bringing Fonterra into the mix (IMO this is one of the most important considerations for continued growth in FY17)
- Fonterra will take BAL to new levels
- production schedules intended to prevent 11/11 out of stock issues,
- increased inventory will enable meeting of optimistic opportunities

Hope this helps remind you why BAL is a great company that's here for the long term! :)

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Thanks heaps for the update! I think BAL is seriously undervalue and as one legendary investor said: Price is what you pay and value is what you get and I certainly think BAL is great value at current prices compared to the growth demands going forward.

Out of curiosity, were there lots of details on how they will be spending their $15-$20M? (other than a few liners about marketing and people). I understand the focus is quite heavy on 11/11, and the supplies are there to grab market share against competition. Were there details about increasing distribution through daigous? (given the channel mix has changed).

Any price increase in the future?

Sorry for all the questions - didn't attend - and i wish i had so i could ask those questions...

BAL Price at posting: $12.03 Sentiment: Buy Disclosure: Held
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