Good morning, everyone. I'd like to welcome you to the presentation for the first half results for FY2024 for Noumi Limited. It is a pleasure to be here with you today, and thank you for joining. The results will be presented today by myself and Pete Myers, the Group CFO, who will go through the financial results of the company. We've already uploaded the presentation, and you can navigate to the slides as you choose, or you can follow on the screen. We'll talk to each of the slides and refer to the page numbers as we progress. Slide 3 is the agenda for today's call. We'll focus on the callouts from the results and discuss the key elements of the company's evolution. Pete will present the financial performance for the period. I will then talk to the strategy of the company, followed by closing remarks.
The key messages for today's call: We are proud of the progress that we are making as we execute our plans. The results for the first half of FY2024 represent another period of solid progress against our plan to reset, transform, and grow the company, with all key operational financial metrics moving consistently in the right direction. Both our segments delivered strong sales and profit growth, with other record performance from plant-based milks and positive earnings from dairy nutritionals marking a genuine improvement in challenging market conditions. Moving to slide 5: We've executed against our plans. The year has seen strong execution of our plans, and the transform and growth strategy continues to deliver improved results, with EBITDA of AUD 23,100,000 , up 35.2% from the first half of FY2023. This is a promising result as we continue to deliver to the plan that we laid out.
This result is a credit to the entire team across the business. The plant-based milks business is up 6.1%, with an EBITDA of AUD 23,100,000 , with continued growth in our MILKLAB brand. The MILKLAB brand has continued its growth, with revenue up 6.8% across dairy and plant-based milks. As mentioned at the beginning of the call, dairy nutritionals continues to show improvement, with EBITDA in this period of AUD 2,200,000 compared to the AUD 1,900,000 loss in the first half of FY23. The Australian Dairy Industry faces significant pressure as the disconnection in the global commodity price versus the Australian farm gate milk price continues. This places significant pressure on exports and bulk commodities.
The business continues to remain focused on the domestic market, with key export customers playing an important role, although we are challenged with the current pricing structure. The unrestricted cash and undrawn facilities of AUD 26,500,000 at 31 December 2023. On slide 6, we present the key financial metrics. As already mentioned, the EBITDA is AUD 23,100,000 , pleasingly up AUD 6 ,000,000 from the same period last year.
Net revenue is up AUD 16,900,000- AUD 296,700,000 . As we continue to rebuild the company, we have seen the net loss after tax of AUD 27,700,000 , including the AUD 32,300,000 of convertible note fair value adjustments. Dairy nutritionals delivered a positive EBITDA of AUD 2,200,000 on the back of AUD 209 ,000,000 of revenue, up AUD 11 ,000,000. This is a result of our disciplined approach to focus on products with higher margins and delivering better returns. The plant-based milk EBITDA was another record of AUD 23,100,000 . Revenue for plant-based milks of AUD 87,500,000 was up over AUD 5 ,000,000 versus the same period last year.
This is a strong result and achievement we are all proud of. Moving to slide 8: As you recall, we continue to talk about our three-part reset, transform, and growth strategy. We are embedding the transformational changes in dairy and nutritionals with a focus on the growth phase in plant-based. The company is focused on the great brands and world-class assets that we operate to produce our products. Many of the transformation initiatives are substantially complete. Actions to transform your company are now well underway, with operational improvements across the business already driving improved sales and margins with our new values incorporated to all work practices. Those improvements provide the springboard to grow the business through three pillars: products, channels, geographies. Plant-based milks clearly established in the growth phase. Moving to slide 9: Previously, I laid out the transformational program to deliver long-term growth.
We are pleased with the progress we are making, notwithstanding the headwinds we are facing. There are, though, a number of highlights. You will see we are executing against our strategy. The only substantive reset item left is the corporate legacy issues that continue to progress in line with usual timetables. Dairy and nutritionals have performed well in half one FY2024 with a focus on margin and operating efficiencies. To continue the growth, MILKLAB is continuing to grow, showing over 51% sales growth in the first half. The plant business is firmly in growth phase, consistency of performance, investing in attractive initiatives anchored by our core brand, MILKLAB, and supported by Australia's Own. We continue to partner with distributors locally and internationally as we drive further initiatives. Internationally, there are a few key areas we are focused on to ensure success in these regions.
We continue to build our investment into our products and brands across the majority of our portfolio. I'll now hand over to Pete to go through the financial performance of the business.
Thanks, Michael, and good morning, all. I'm delighted that we're able to report a continuation of the progress that we shared at the 2023 full year briefing as we execute on our transform and grow agenda. Michael has summarised the key messages contained in the half year material that we released to the ASX this morning. We are pleased that our messages remain consistent with the last couple of announcements: another record result for plant-based milks, an improvement in dairy compared to half one last year. But we still have much to do, challenges to be overcome, and much opportunity ahead. We have opportunities ahead for our plant-based milks business, both in Australia and overseas, and we have delivered progress in the dairy business.
As Michael said, dairy faces challenges from the dislocation of the domestic and global dairy markets, but the improvements that we have made mean that we are addressing these challenges from a much stronger position today compared to the circumstances we were in a year or so ago. While industry conditions are dynamic and we remain cautious about the macroeconomics, our results continue to improve, we are becoming stronger, and we're encouraged by our progress. Now, let me turn to some of the specifics of the result, but first a few grounding comments. We have generally referred to our adjusted operating EBITDA numbers as being our most important measure of operating performance and the most useful for investors. If Michael or I just say EBITDA this morning, that's what we mean.
It excludes all one-off style restructuring amounts, such as impairment charges and things like the U.S. litigation expenses and other legacy issues. There is an important change in the way we present the EBITDA result this year. Historically, we have presented our primary EBITDA on a pre-AASB 16 basis. AASB 16 is the accounting standard that deals with leasing. It effectively recharacterizes rent into depreciation and interest. Almost all our peers and ASX listed companies have transitioned to highlighting EBITDA on a post-AASB 16 basis, and we have done the same from this reporting period. This ensures that we are presented on a comparable basis to our peers. There is no difference to revenue. There's no difference to our balance sheet or our cash flow, and we have updated all of the EBITDA comparisons in our ASX announcement to be on the same basis as the current year.
So all of the improvement metrics that we are describing this morning are truly like the like. There is a complete reconciliation of these adjustments into the statutory numbers in the appendices at the back of the slide deck. Now, sorry with that mouthful over. Michael, skipping to slide 13, I'm pleased to report that all of our key operating metrics on this slide have improved again during the half: revenue up overall compared to the prior period in plant-based milks, MILKLAB, as well as private label. In dairy and nutritionals, price and volume increases in domestic dairy and actions to limit the impact of the global dairy headwinds. Adjusted operating EBITDA of AUD 23 ,000,000, up 35% from the first half of last year. The statutory loss of AUD 27,700,000 includes a fair value adjustment on the convertible notes of AUD 32 ,000,000.
Now, a feature of this result is that it's much cleaner. There are no impairments. There's very little restructuring style charges, which is another reminder of the progress that we're making through the transformation phase of the turnaround. And as noted earlier, there is a full bridge from EBITDA to net loss after tax in the appendices. In terms of cash and capital, we've got lower cash than we had at June 2023, largely attributable to a delay in some routine debt of financing drawdowns that moved from late December 2023 to early January 2024. In the same time, we paid down our conventional financial debt, AUD 6 ,000,000. Consistent with prior periods, we've included a pro forma view of the balance sheet in the event that the convertible notes were converted, and conversion would obviously make our balance sheet much stronger.
As we've said before, we don't carry any value for our flagship asset, the MILKLAB brand, on our balance sheet. MILKLAB has been built from scratch in less than 10 years, and we consider it's worth hundreds of millions AUD, and it continues to grow. Moving to slide 14, we're delighted with another record result from the plant-based milks business with EBITDA for the half year, up 6.1% to AUD 23,100,000 . There are a range of highlights to this result and still some opportunities to be pursued. Growth in our key brands, MILKLAB, plant sales up 4.6%. Growth in our range, the new oat formulation delivering growth of almost 52% on the same period last year. Solid growth for MILKLAB Almond and big initiatives underway to extend its geographic reach and strong performance from private label, giving consumers options.
We continue to believe this business has a great future, and with a mix of branded and private label volumes, we're well placed to respond to any shifts in consumer behaviors resulting from macroeconomic factors. It's a great business with great brands and a great future. Slide 15 showcases the continued progress of the dairy and nutritional segment compared to the same period last year: positive adjusted operating EBITDA of AUD 2,200,000 , an improvement of AUD 4,100,000 on the loss of AUD 1,900,000 in the first half of last year. We had some good winds: domestic long-life milk sales up 28% with increases in volumes, as well as the recovery of cost increases. Consumer nutritional sales up 11%, supporting a turnaround in the profitability of this unit also. It could have been even better.
Global dairy conditions have impacted on the prices we receive for bulk cream and impacted our first half EBITDA by AUD 4 ,000,000 compared to the same period last year. We had disruptions to our Lactoferrin production, which meant Lactoferrin sales were down 37% in the half, also impacting EBITDA for the period. Export revenues were down 3%, but our actions protected profitability as volumes of low-margin formats were reduced. Overall, a good result for dairy and nutritionals, with positive EBITDA and good half-on-half improvement. But the headwinds in exports, commodity prices, and Lactoferrin meant that earnings were still relatively small and dairy is not yet cash flow positive. This is the next goal, and that is why improvement in the dairy performance is so important.
The recipe is clear: product mix in favor of high-margin products, operating efficiencies, service quality and reliability, and great customer relationships where we work constructively to navigate external challenges. So our message is one of progress, but consolidating our improvements is the key to continuing our journey. Turning to slide 16, our cash flow performance was impacted by the timing of drawdowns, as I said before, of our debtor financing facilities in late December. Put simply, this means that our accounts receivable were circa AUD 9 ,000,000 higher and cash was almost AUD 9 ,000,000n lower than if the drawdowns would have occurred as normal. Otherwise, we're satisfied with our cash management and cash flow in the half. We are actively managing working capital, although inventories are higher at the end of December than we planned.
The Lactoferrin disruption and some changes to our consumer nutritionals supply chain have contributed to this increase, and inventory is a clear focus for us for the second half. Our approach to capital expenditure remains disciplined. Our net financial debt, excluding the AASB leases and the convertible notes, was repaid by AUD 6 ,000,000 during the period. Net finance costs were AUD 9 ,000,000, not including any cash interest on the convertible notes, where interest is capitalized and rolled up for the period. Consistent with the terms of the convertible notes when they were issued three years ago, no cash interest was payable until now, but we now pay AUD 4,500,000 a quarter, with the first payment being made in early January 2024.
The focus we have had on improving our earnings to prepare for the end of the cash interest holiday has been an important part of our planning over the last couple of years. So to recap the financials, overall EBITDA are up 35%, AUD 23 ,000,000 for this half compared to AUD 17,000,000 last year. Dairy and nutritionals delivers a turnaround of AUD 4 ,000,000 in EBITDA compared to H1 FY23. We adapted to lower volumes. We withstood difficult global dairy conditions. We optimized mix. We grew our domestic business, and we improved our operating metrics. Another record result for our plant-based milks business with strong performance across the board and with opportunities to expand our range and footprint underway. With that, I'll hand back to Michael for some further remarks.
Thanks, Pete. I want to thank Pete and the finance team for the clear presentation on the financial performance of the business. As Pete mentioned, consistency is key, and information is also important for the entire business to understand the performance. Moving to slide 18, I'd like to talk further regarding our strategy. A strategy that I've spoken to about previously is to develop high-quality and innovative dairy and plant-based products to meet the different nutrition and taste needs of customers and consumers across all life stages. We have five key strategic pillars: complete the dairy and nutritionals turnaround, accelerate plant-based milks growth, deliver world-class supply chain, embed high-performance culture, and build future growth platforms. Through these five key pillars, we've developed strategic priorities to focus on. These drive the focus of the business to bring shareholder value.
The strategic pillars are well established in the business, and we have a clear roadmap. We've ensured consistency in these areas to allow the team to understand the pathway to success. With the results presented today, you can see that we've been able to show strong progress. A number of priorities, though, have already been executed. Some of these you've seen before as we continue to transform and accelerate our growth. Build dairy into a profitable and growing business. Invest to strengthen and grow the MILKLAB brand, including investing to accelerate global market expansion. Embed Noumi culture and values. Unlock plant-based milk growth through channel, range, and geographic expansion. These priorities will assist in driving shareholder value. On slide 19 is the strategy for the plant-based milk segment.
As highlighted by Pete, we continue to see our brands in plant-based grow year on year and deliver positive earnings across the group. Our focus areas are very clear. We'll continue to invest in marketing and to strengthen the brand equity of MILKLAB and Australia's Own. Our MILKLAB Oat product continues to perform for us and our customers. It is key to drive the range through the café segment. Expand MILKLAB into new consumer occasions. Our big opportunity is to concentrate our effort and grow in key international markets with attractive demographics and strong coffee cultures, where we can benefit from the skills and experience we gained from the establishment of MILKLAB in Australia. Development of innovative new plant-based beverages that meet changing consumer preferences, focusing on health and taste. Working with partners that will help us drive successful campaigns is key to the strategy.
As mentioned on our last update, we've accelerated our investment in the brand across many platforms. This is a brand that we are proud of, a brand that originated and we developed in-house, a brand that is only eight years old. It is super impressive. We've been very systematic in building the reach and the value of the brand, and it has a great future. Moving to slide 20, the dairy and nutritional strategy is about consolidation of operational efficiencies and margin growth. In light of the many challenges, the significant turnaround that we have achieved has continued in the first half, including reductions in waste and other operational efficiencies, but acknowledging once again that there is more to do.
As Pete also mentioned, the impact on the results with the bulk commodity pricing has shown the significant achievement in the long-life business against the significant headwind of the bulk commodity price. We continue to focus on opportunities to meet markets seeking high-specification Lactoferrin. Research is also continuing around the health benefits of Lactoferrin to leverage the investment already made. With some positive performance about some of our dairy range, including MILKLAB lactose-free and Australia's Own lowest cholesterol, we'll leverage this off to strengthen both of these brands domestically and internationally. Sports and wellness nutrition market continues to grow. Key to our participation in this market is building our brands, innovation, and operational capabilities. International competitiveness is a challenge for the Australian dairy industry. For our part, we are maintaining a strong discipline on volume and margin. We are working on our own operational efficiencies.
For our part, we are in a significantly better position on positive actions that we have taken. We are focusing on the controllable elements. Moving to slide 21 is our ESG strategy. It brought together our integrated Healthier Tomorrow plan. This plan, as you may have seen, was released in 2022 following consultation with suppliers, business partners, and our own team. Our ESG strategy is integrated across our value chain, from dealing with our supply partners to manufacturing to delivery of our products to our customers. We are continuously improving processes to meet or exceed our ESG targets. I'd like to update you on a few of the key achievements. We are moving to have all of our packaging APCO compliant by 2025, and all MILKLAB and Australia's Own products are now compliant.
We have all our dairy farm supplies part of our food safety program, which helps continue their stewardship of the land. With continuing engagement within our own team, we were successful in increasing our engagement scores by four percentage points, which is in line with our targets. We'll continue to aim for a further four percentage point lift in the coming year. This year, we've also exceeded our target of over 75% of our own brands carrying the minimum of the four-star health rating. As you can see, we are deeply embedding the ESG practices across all parts of our business. We'll continue to look for opportunities. Slide 22, with our trading outlook, plant-based milk is firmly in the growth phase. We expect the performance of our plant-based milks to remain strong as it benefits from demand in Australia and targeted overseas markets.
We're investing in growth domestically and internationally, with updated ranges leveraging the strength of our MILKLAB range. In dairy and nutritionals, we continue to build the momentum created, the disconnect of the global commodity prices impacting the competitiveness of the Australian dairy industry. We will focus on embedding operational efficiencies and continue to build on internally created brands. The company is positive about its progress, and this is evident with these results. Macroeconomic conditions continue to create uncertainty and volatility. We'll consolidate and embed progress to date. We need to execute consistently against the strategy and prepare for the evolving consumer. We are doing what is in our control. We are setting up for medium to long-term sustainable growth. I'd like to thank you all for listening today, and I want to reiterate that the significant transformation of your company is well underway.
The results we are delivering today are a testament to that. There is still more work to do. We have a clear roadmap. Execution is key. While considerable challenges remain, from increased domestic and international competition to cost of living pressures on consumers, the operating improvements we have made as this business is now being reflected in more consistent performance have put us in a clear path to long-term sustainable growth. Right across the business, including the board, we are committed to a pathway forward, and we hope that is evident. I want to thank all stakeholders within the business, not least our staff. We would not be here today without them, and I want to thank them for all the effort. That concludes the formal part of the presentation. We'll now move to Q&A.
Thank you, Michael. At this time, we have a number of questions submitted by shareholders. The first question relates to the convertible note fair value adjustments. What factors would impact these values? For example, would it be the interest rates set by the RBA?
Thanks very much for the question. The notes have got a conversion option. They've got cash payment requirements, and they've got repayment provisions. That makes them a complex financial instrument according to the accounting standards, not quite a loan and not quite an option. We get them expertly and independently valued at each reporting period by a qualified third-party expert. A lot of factors go into the valuation of the notes and therefore the adjustment to fair value each period, including discount rates, which is not exactly the RBA rates, but it certainly reflects the cost of capital in markets generally, time to maturity, cash interest payments, the valuation of the option component, and the conversion features. I'm sorry it's a bit of a mouthful, but all of those factors do go into the fair value adjustment that we report each period.
The next question comes from a shareholder. It relates to the distribution of MILKLAB products in McDonald's outlets. What percentage of group revenues come from that revenue?
Yeah, thank you for your question. We have significant distributors between all of our MILKLAB brand in the out-of-home market. McDonald's is an important customer getting to our consumers as well as many of our other customers. We regularly manage and monitor the concentration of any of our customers. Don't have a specific number to provide, but at this moment, we ensure we have supply across many different distributors in that market for our MILKLAB brand.
Thank you, Michael. Next question is, I appreciate that you can't provide financial guidance, but could you talk about your cost expectations going forward, e.g., salary, freight, energy, etc.?
Yeah. No, thank you for that question as well regarding that cost. We continue to monitor, especially with the cost of living pressures, and ensuring that our practices are getting more efficient across our operation and ensuring wastage is continually monitored. We are well aware of future cost increases and cost pressures that may come from utilities, wages, and supply chain. Continuing to improve our overall supply chain and operational efficiencies to ensure that we can offset many of those, but it is something that we continue to factor into our business as we move forward.
Thank you, Michael. The next question is, could you remind us what happened with the Lactoferrin production disruptions?
Yeah. Regarding the Lactoferrin disruptions, there's been a couple of areas regarding the disruption that we've seen there, and some of that is to do with just overall volume of supply of milk coming through the factory. As you saw from our notes, some smaller volume does also Lactoferrin is an output of the amount of milk that we have to process. There's been some specification changes that we've been working through. So what we've seen is a bit of a timing around that first-half disruption to the Lactoferrin in these results.
Thank you, Michael. Look, a related question. Would you be able to provide more detail, including root causes, timing, as well as relevant correction, preventative, and risk mitigation actions considering the importance?
That is something in terms of this business we've been very focused on in terms of ensuring the quality. As we want to drive for high-specification Lactoferrin, Tim, we've been very focused on that. We've been able to consistently deliver that product, and that is the approach to the business to ensure that product meets specification and high quality. So very large focus across the business, and it is something we're quite confident on in terms of the position in the future.
There are no more questions at this time.
Once again, thank you, everyone, for joining to the presentation of these results. As highlighted, we appreciate the effort of everybody joining the call, and I also appreciate the effort of all of our team members. You can see the results in this first half are a testament to the effort that we're putting in. We continue to focus on building the shareholder value in this business, and we continue to build on the strength of our brands, especially MILKLAB and Australia's Own, and focus on the operational improvements across the business. Thank you for your time, and look forward to speaking when we present our full year results in August.