New Zealand Professional Investment Services Firm

Forsyth Barr

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

<ul><li>Synlait Milk's (SML) second FY23 NPAT guidance downgrade in the space of six weeks provided another timely reminder of the significant operating leverage in the business and the high concentration (and therefore high risk) nature of its operations</li><li>FY23 NPAT is now expected to be approximately break-even versus March 2023 guidance of ~NZ$20m and December 2022 guidance of exiting FY23 at similar profitability levels to pre-FY21 (~NZ$75m)</li><li>There is a wide margin of error on the recovery trajectory, but we now forecast normalised FY25 NPAT (which includes the full contribution of SML's new multinational customer and a strong ATM margin recovery) of NZ$30m (~12x FY25 PE).</li></ul>

Synlait Milk's (SML) second FY23 NPAT guidance downgrade in the space of six weeks provided another timely reminder of the significant operating leverage in the business and the high concentration (and therefore high risk) nature of its operationsFY23 NPAT is now expected to be approximately break-even versus March 2023 guidance of ~NZ$20m and December 2022 guidance of exiting FY23 at similar profitability levels to pre-FY21 (~NZ$75m)There is a wide margin of error on the recovery trajectory, but we now forecast normalised FY25 NPAT (which includes the full contribution of SML's new multinational customer and a strong ATM margin recovery) of NZ$30m (~12x FY25 PE).

Synlait Milk

Synlait Milk: Stuck in the Mud