Select Harvests Limited · ASX:SHV
Select Harvests — H1 2021 Earnings Presentation
36 slides from Select Harvests's earnings presentation, May 28, 2021
Slide 1: Select Harvests Limited 1H FY 2021 Half Year Results Presentation
Click to edit Master title style Select Harvests Limited (ASX:SHV) 1H FY 2021 Half Year Results Presentation to 31 March 2021 28 May 2021 Paul Thompson Managing Director & CEO Brad Crump CFO & Company Secretary Click to edit Master text styles Piangil Almond Orchard 1
Slide 2: Webcast Information
Click to edit Master title style This presentation deck accompanies a live webcast at 1.00pm AEST on Friday 28 May 2021 You can participate in the webcast: ■ by using the following link https://us02web.zoom.us/webinar/register/WN_hoo8FakHTv65ukpAYVG7eA ■ or by following the links on the Select Harve
Slide 3: Disclaimer
Disclaimer Click to edit&Master Basis title of Preparation style This presentation is provided for information purposes only and has been prepared using information provided by the company. The information contained in this presentation is not intended to be relied upon as advice to investors and do
Slide 4: Business Performance
Click to edit Master title style Business Performance Click to edit Master text styles 4 4
Slide 5: 1H FY 2021 Financial Overview
1H FY 2021 Financial Overview Click to edit Master title style Lower global almond prices have negatively impacted earnings 1 Earnings per Share (Basic) $1.3m $12.8m 1.1 cents 1.1% Margin 11.1% Margin Due to the current unfavourable market conditions no dividend has been declared for the interim fin
Slide 6: 1H FY 2021 Operating Overview
1H FY 2021 Operating Overview Click for to 2021edit Master title style Continue to maintain better than industry standard yields, with a record almond crop estimated Almond Crop Average Almond Price Currency 28,250 MT $6.00/kg $0.73 AUD/USD Continue to maintain better than industry 50% of the 2021 S
Slide 7: Operating Performance
Operating Performance Click to edit Master title style It is anticipated that the second half of 2021 will be similar to the first half result Almond Sales Processing Water The 2021 crop has been fully harvested and 40% of the 2021 total crop has been processed 2021 crop water commitments have been
Slide 8: 1H FY 2021 Results in Context
1H FY 2021 Results in Context Click to edit Master title style The company remains focused on factors within its control such as almond volume, quality and production costs Almond Volume Almond Price Total Almond Production Cost NPAT Click to edit Master text styles 5 Yr Average 8 88
Slide 9: Income Statement
Income Statement Click to edit Master title style Result impacted by reduction of global almond pricing Income Statement ■ Increased revenue due to Covid-19 delayed 2020 crop sales $ millions 1H FY 2021 1H FY 2020 Variance % occurring during 1H FY 2021 Almond Volume MT 28,250 23,250 5,000 21.5% ■ 1H
Slide 10: Group EBIT Movement
Group EBIT Movement Click to edit Master title style 1H FY 2021 Group EBIT significantly impacted by lower global almond prices Group EBIT1 Movement Click to edit Master text styles 1 - Non-IFRS measures used by the company are relevant because they are consistent with measures used internally by ma
Slide 11: Current Year Almond Crop Sensitivities
Current Year Almond Crop Sensitivities Click to edit Master are hedged title style 40% of SHV’s 2021 total crop has been processed to date, with 50% contracted for sale. 80% of export sales forecasts against the USD at $0.73 ■ A portion of the current year almond crop is classified as a biological a
Slide 12: Crop Costs
Crop Costs Click to edit Master title style Increase in cost per kg due to maturity profile and lower net yield Cost per Kg – 2020 Crop vs. 2021 Crop Crop Costs by Type Processing Harvesting Lease Other Irrigation Repairs & Maintenance Harvest Freight Water Chemicals & Spray Bees 2020 Crop 2021 Crop
Slide 13: Balance Sheet
Balance Sheet Click to edit Master title style Balance Sheet remains in a strong position Half Year Ending Balance Sheet ■ Increased current assets – inventory / biological assets $ millions 1H FY 2021 1H FY 2020 balance increase due to larger crop produced and on hand for sale (Piangil). Receivable
Slide 14: Cash Flows
Cash Flows Click to edit Master title style Positive operational cashflow due to Covid-19 related timing of sales ■ Lower EBITDA1 of $12.8m - operational performance due to Cash Flow lower almond pricing $ millions 1H FY 2021 1H FY 2020 ■ Working capital improvement due to the Covid-19 related EBITD
Slide 15: Market Outlook
Click to edit Master title style Market Outlook Click to edit Master text styles Carina West Processing Centre 15 15
Slide 16: Global Almond Supply
Global Almond Supply SHV remains well positioned through its low operating costs, ability to deliver large scale value-add Click production andto edit strong Master balance titlefrom sheet to benefit style an increase in almond prices going forward Australia, the U.S. (specifically California) and
Slide 17: Global Almond Demand
Global Almond Demand Click to edit Master title style Demand for almonds is growing in all markets, with record breaking export shipments Almond shipments continue to respond strongly to the 10-year low price environment, with record-breaking monthly U.S. and Australian shipments − Combined Austra
Slide 18: Strategy and 2H FY 2021 Priorities
Click to edit Master title style Strategy and 2H FY 2021 Priorities Click to edit Master text styles 18 18
Slide 19: Select Harvests Strategy
Select Harvests Strategy Click to edit Master title style Select Harvests – in control of our destiny Click to edit Master text styles 19 1919
Slide 20: Volume Growth
Volume Growth Click to edit Master title style Our investment in greenfield developments and orchard acquisitions will platform long term growth Select Harvests Theoretical Harvest Volume (2021 – 2028)1 Click to edit Master text styles 1 The almond crop is biennial in nature with expected +/- 10% pe
Slide 21: People Planet Profit
Triple Bottom Line Click to edit Master title style People Ethics & Integrity, OHS & Wellbeing, Inclusion & Diversity, Human Health & Nutrition, Food Safety, Sourcing Sustainability Profit Planet Positive absolute shareholder returns, 20% or higher EPS Resource Efficiency, Sustainable Farm CAGR over
Slide 22: 2021/22 Focus Areas
2021/22 Focus Areas Click to edit Master title style Planet Water Efficiency Sustainability Orchard Composting 100% of our orchards use drip Develop sustainability targets to build Seeking a license to sell surplus irrigation tree and soil monitoring on 2020 Sustainability Report compost to third pa
Slide 23: 2H FY 2021 Top Priorities
2H FY 2021 Top 10 Priorities Click assets to edit Master title style Continue to execute on our growth strategy, underpinned by a world class portfolio of almond 1. Safety and Wellbeing - Ensure the safety and wellbeing of our employees 2. 2022 Horticultural Program – Deliver optimal tree health and
Slide 24: Thank You
Click to edit Master title style Thank You Please direct any queries to: Paul Thompson Brad Crump Andrew Angus Managing Director CFO and Company Secretary Investor Relations +61 3 9474 3544 +61 3 9474 3544 +61 402 823 757 Please note that background material/data regarding the global almond industry
Slide 25: Appendix
Click to edit Master title style Appendix Click to edit Master text styles 25 25
Slide 26: Orchard Portfolio
Orchard Portfolio Click to edit Master title style One of the worlds largest almond growers, with a geographically diverse 9,262 hectare orchard portfolio Select Harvests Orchard Map1 Benefits of Geographic Diversity & Scale ■ Geographic diversity limits exposure to: − Weather − Disease spread − Ins
Slide 27: Orchard Profile
Orchard Profile Click to edit Master title style 2.6x growth in planted hectares since 2012 1 Select Harvests Orchard Profile Select Harvests Planted Almond Hectares1 Select Harvests Total Planted Almond orchard portfolio (as at 30 September 2020) hectares acres Central Region Company Owned 1,693 4,
Slide 28: Orchard Age
Orchard Age Click to years, editwith Master title style Following the Piangil Almond Orchard acquisition, Select Harvests weighted average orchard age is 13.6 98% of current planted acres cash generative Age Profile of Select Harvests Almond Orchards1 (98% of current planted hectares are cash genera
Slide 29: Almond Prices
Almond Prices Click to edit Master title style Higher quality almond varieties are in short supply and have benefitted from rising prices Farm Gate Almond Prices (USD/lb) Click to edit Master text stylesNPS 23/25 Cal SSR 27/30 AOL BSU5% Source: Derco Foods 29 2929
Slide 30: Almond Shipment Update
Almond Shipment Update Click to edit Master title style U.S. and Australian almond shipments have responded strongly to lower almond prices 2020/21 Crop YTD (Million Lbs.) 2019/20 Crop YTD (Million Lbs.) U.S Shipments: Aug 2020 to Apr 2021 Aug 2019 to Apr 2020 % Change Carry-in from 2019 crop 450 31
Slide 31: Water Market Update
Water Market Update Click to averages edit Master title style The 2020/21 water season has seen higher allocations and a movement of prices back towards long-term Water Prices Climate Outlook ■ The 2020/21 water season has seen a movement of temporary water prices back ■ Wetter than average winter d
Slide 32: Water Use Efficiency of Almonds
Water Use Efficiency of Almonds waterClick used andto the edit highest Master title per style Almonds have the highest calories per ML of water used, the highest protein per ML of dollars generated ML of water used Calories per ML Kg Protein per ML Dollars per ML ($) Water Use (ML/Ha) Click to edit
Slide 33: California Drought Monitor
California Drought Monitor 26% inClick to Drought edit Master title style 94% of California is currently in a Severe Drought, with 74% of the state in Extreme Drought and Exceptional Points to Note U.S. Drought Monitor California (May 25, 2021) 74% of California is currently experiencing Extreme D
Slide 34: Global Almond Product Introductions
Global Almond Product Introductions This isClick resultingto edit Master title style Almonds remain the leading nut type for introductions into new consumer food products globally. in increasing demand for value-added manufactured almonds. Global New Nut Introductions by Type (2013 to 2020) Click to
Slide 35: Australian Almond Product Introductions
Australian Almond Product Introductions Click into2020edit Master title style Australian almond introductions increased by 20% CAGR between 2010 and 2020, reaching 386 new products Australian New Almond Introductions (2010 to 2020) Click to edit Master text styles Source: Innova Market Insights, May
Slide 36: Useful Almond Industry Websites
Useful Almond Industry Websites Click to edit Master title style Industry Associations Californian Almond Board www.almondboard.com Almond Board of Australia www.australianalmonds.com.au Industry Reports US Crop Forecasts (Subjective, Objective) https://www.almonds.com/tools-and-resources/crop