Synlait Milk Limited (NZX: SML) announces $200 million equity raising

Tuesday 10th November 2020

Synlait Milk Limited (“Synlait” or the "Company”) (SML.NZX/SM1.ASX) today announced an equity raising (“Equity Raising”) via an approximately $180 million underwritten placement at a fixed price of NZ$5.10 per share (“Placement”) and a $20 million underwritten share purchase plan (“Share Purchase Plan” or “SPP”).

Proceeds from the Equity Raising will support Synlait to:

• Complete the investment phase of its strategy including the customisation of Synlait Pokeno and Auckland for processing and packaging equipment to service its new multinational customer.

• Strengthen its balance sheet to:

• provide more financial headroom as it navigates COVID-19, which is having an unpredictable impact on the stability of its current and future earnings; and

• create capacity to deliver on its purpose: Doing Milk Differently For A Healthier World.

FY21 Guidance Update

• Synlait now expects consumer-packaged infant formula volumes to be lower than FY20, with softer demand in HY21 than previously expected as our key customer resets its own inventory levels.

• Synlait still expects volumes to increase in the second half of FY21 once stocks have cleared, however we are expecting our HY21 NPAT result to be significantly lower than HY20.

• Against this, we now expect to be at or slightly below the FY20 NPAT result for FY21 as Synlait continues to focus on optimising its assets and manufacturing efficiencies.

• This guidance is subject to the unpredictable effects of COVID-19, with consumer behaviour, channel dynamics and supply chain disruptions all subject to change. further update will be provided at Synlait’s half year result in March 2021.

• A further update will be provided at Synlait’s half year result in March 2021.

See the links below for more details:

Announcement: Synlait announces $200 million equity raising

Presentation: Equity Raising Presentation

Corporate Action Notice

ASX Appendix 3B

Source: Synlait Milk Limited

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