Bega Cheese builds momentum with $245m FY2027 EBITDA target

FY2026 earnings strengthen Bega’s growth case

Bega Cheese Limited (ASX:BGA) has set a higher earnings base for its next phase of growth, reporting normalised EBITDA of $225.6 million for FY2026 and guiding to $240 million to $245 million in FY2027. Normalised profit after tax rose 36% to $69.0 million, while earnings per share increased to 22.6 cents.

The result builds on the company’s previously reported statutory FY2026 profit of $54.8 million and revenue of $3.77 billion, with the latest presentation placing the emphasis on underlying performance. Net revenue reached approximately $3.8 billion, the normalised EBITDA margin increased to 6.0%, and return on funds employed reached 10%, two years ahead of the company’s earlier target. The stronger result was driven by both the Branded and Bulk businesses, as well as productivity programs across the manufacturing network. It also extends the trajectory described in Bega’s FY2026 results.

Automation and consolidation underpin FY2027 guidance

Bega said the Branded business led FY2026 growth, with yoghurt, milk-based beverages, spreads and cream cheese benefiting from high-protein and “better for you” product launches. Foodservice grew 6%, while international branded sales continued to expand, particularly in Southeast Asia. The company also highlighted stronger nutritionals, bio-nutrients and infant nutrition activity within Bulk.

The efficiency story is less glamorous but potentially just as important. Strathmerton’s cheese production was consolidated into Ridge Street in the Bega Valley during June, the Kingaroy and Tolga peanut sites were sold, and automation at the Laverton distribution centre was commissioned in the second half. Those moves follow the manufacturing footprint consolidation outlined earlier in FY2026. Bega said Laverton was already delivering benefits in the first quarter of FY2027, while the Strathmerton savings are expected to flow through the current year.

Management expects first-half earnings to be relatively flat, with stronger growth weighted towards the second half. The FY2027 plan includes about $110 million of capital expenditure, focused on lower-cost manufacturing and capacity in yoghurt, cream cheese and milk-based beverages. Bega said the projects are intended to support growth from FY2028 onwards, rather than provide an immediate earnings lift.

Balance sheet remains flexible despite transformation costs

Net debt ended FY2026 at $151.6 million, up $25.5 million, largely because the company paid $37.1 million in restructuring costs. Operating cash flow fell to $129.3 million from $165.0 million, while capital and intangible expenditure increased to $109.8 million. Even so, the leverage ratio remained at 0.8 times, unchanged from FY2025, and the total dividend increased 21% to 14.5 cents per share, fully franked.

Bega reaffirmed its ambition to exceed $310 million in normalised EBITDA by FY2031, alongside revenue of $4.3 billion to $4.7 billion and earnings per share of 37 cents to 39 cents. Proxy voting at the AGM showed strong support for the remuneration report, the re-election of Peter Margin and the election of Terry O’Brien, while the proposed proportional takeover provisions received 99.56% support of proxies shown. The presentation does not establish the final poll outcomes.

The next test is execution rather than strategy: whether the second-half earnings lift arrives as guided, whether Laverton and site consolidation savings offset the planned investment cycle, and whether Bega can convert its growing wellness and international pipeline into returns without allowing capital intensity or supply constraints to erode margins.