Rationalisation lifts Bega back to profit

Bega Group returned to profit in FY26, reversing the $8.5 million loss in FY25 as two years of manufacturing rationalisation took effect. Revenue rose 6.7 per cent to $3.77 billion and statutory EBITDA lifted 22.2 per cent to $202.3 million, with both the Branded and Bulk segments contributing growth.

Branded segment normalised EBITDA was $220.7 million, up eight per cent, on volume growth in yoghurt, milk-based beverages and white milk, and higher demand for high protein and better for you products. International revenue grew 12 per cent. The segment also banked savings from the exit of primary peanut processing.

Bulk normalised EBITDA was $53.2 million, up 37 per cent, reflecting higher milk intake, a higher value dairy ingredients product mix, stronger nutritional powder sales, and better alignment between dairy commodity prices and farmgate milk prices in the first half. The group also pushed more bulk ingredient volume into its own branded range.

Unallocated costs widened to negative $48.3 million from negative $41.9 million, on payroll inflation, software as a service investment and the cost of implementing a back-office efficiency program the company expects to benefit FY27.

Network changes carry the result

Normalised items for the year relate almost entirely to two manufacturing decisions: the closure of the Strathmerton site in Victoria and consolidation of cheese packaging and processing into Ridge Street at Bega, and the exit from primary peanut processing, including the sale of the Kingaroy and Tolga facilities in Queensland.

Two projects were completed during the year: the Ridge Street consolidation and the automation of Bega Group’s largest warehouse at Laverton. The company expects both to deliver significant savings in FY27.

That work is visible on the balance sheet. Net debt rose $25.5 million to $151.6 million, driven by the capital investment program and $37.1 million in restructuring payments tied mainly to manufacturing rationalisation. The leverage ratio held at 0.8 times.

The FY25 result, by contrast, was weighed down by those same restructuring costs.

Guidance and dividend

Bega Group declared a final fully franked dividend of 7.5 cents per share, taking the full year payout to 14.5 cents, or $44.3 million. It will be paid on 1 October 2026, with the dividend reinvestment plan activated.

The company guided to normalised EBITDA of $240 million to $245 million in FY27, implying growth of 6-9 per cent on the FY26 result. It also refreshed its strategic plan during the year, extending the horizon to FY31 and lifting its ambition to normalised EBITDA above $310 million by then, with continued focus on Southeast Asia and on protein-led categories.