Ann: Investor Presentation - Lion Dairy & Drinks Acquistion, page-2

Market must like this as shares up in early trade to A$5.37 from A$5.06 on 27 November 2020.

On page 32, it's reassuring to see the comment re existing trading that there's been 'solid rainfall across the (Australian) Eastern Seaboard. Dairy farmers and processors like rain (though not floods).

On page 17, the seasonality of EBITDA - first half of a typical year (1 July to 31 December) - 82 per cent of that metric is generated; second half (1 January to 30 June) only 18 per cent.

If Bega as it says is number two branded milk processor in Oz, which company is number 1? Parmalat?

The LD & D revenue of $1.6 billion but EBITDA of only $56 million doesn't overly impress me but BGA claims efficiencies/synergies of $41 million per annum will be the key. These had better be achieved.

The net debt is a worry if interest rates rise. I'm not trying to be prescient but the Reserve Bank of Australia's prediction that interest rates won't rise for some years is highly unlikely to be true if worldwide economic growth takes off. Higher interest rates may be difficult for any of us to comprehend at present but small businesses who invested and then were hit with former Laborite Paul keating's infamous 21 per cent standard lending interest rates may have perceived the same.

Like many, I'll be giving this issue some of my hard earned but these businesses are presently quite low margin. On balance though, great to see Australian ownership returning. Way better than the dictators in mainland communist China taking it over, no doubt a sore point with that regime given how the FIRB here blocked the proposed Chinese dairy takeover of LD & D despite the Chinese offering more than Bega paid. But would mainland China allow a takeover of an iconic brand there by Australians or a USA company?