Select Harvests Limited · ASX:SHV

Select Harvests — Shareholder Meeting (November 2017)

46 slides from Select Harvests's shareholder meeting presentation, Nov 24, 2017

  1. Slide 1: Select Harvests Limited 2017 Annual General Meeting

    Click to edit Master title style Select Harvests Limited (“SHV”) 2017 Annual General Meeting Positioned for Growth 24 November 2017 Click to edit Master text styles 1

  2. Slide 2: Disclaimer & Basis of Preparation

    Disclaimer & Basis of Preparation Click to edit Master title 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

  3. Slide 3: Michael Iwaniw, Chairman

    Click to edit Master title style Michael Iwaniw Chairman Click to edit Master text styles 3 3

  4. Slide 4: Agenda

    Agenda Click to edit Master title style  Chairman’s Address  Managing Director’s Address  AGM Resolutions Click to edit Master text styles 4 4

  5. Slide 5: Select Harvests Board

    Select ClickHarvests Board title style to edit Master  Michael Iwaniw, Chairman, Appointed Chairman November 2011  Michael Carroll, Non‐Executive Director, Appointed March 2009  Fred Grimwade, Non‐Executive Director, Appointed July 2010  Paul Riordan, Non‐Executive Director, Appointed October 20

  6. Slide 6: Vale Ross Herron

    Vale Ross Herron Click to edit Master title style Click to edit Master text styles Significant contribution to the company across his 12+ years of service Our thoughts are with his family 6 6

  7. Slide 7: 2017 Business Performance

    2017 Business Click to editPerformance Master title style ■ FY2017 Reported Net Profit after Tax (“NPAT”) of A$9.2m compares to the ̶ FY2016 Reported NPAT of A$33.8m ̶ FY2016 Underlying NPAT1 of A$27.9m ■ FY2017 Earnings Before Interest and Tax (EBIT) is A$17.0m compared to ̶ FY2016 Reported EBIT of

  8. Slide 8: Capital Raising

    Capital Raising Click to edit Master title style Purpose:  Pay for Jubilee almond orchards and 1,335 ML of high security water  Restore Balance Sheet strength Funds Raised:  Institutional Placement $45m  Share Purchase Plan $45m Outcome:  21.4m shares @ $4.20 (a 7% premium to 5‐day VWAP prior t

  9. Slide 9: Strategy & Priorities

    Strategy & Priorities Click to edit Master title style H O R I ZON 1 ‐ P E R F EC T T H E C U R R E N T M O D E L Maximize Build our Optimise & commodity Improve supply systems & grow grow almond value through chain efficiency our people agri assets innovation VISION H O R I ZON 2 ‐ T R A N S I T I

  10. Slide 10: Paul Thompson, Managing Director

    Click to edit Master title style Paul Thompson Managing Director Click to edit Master text styles 10 10

  11. Slide 11: FY2017 Business Performance

    FY2017 Click Business Performance to edit Master title style ■ Almond Division ̶ EBIT A$17.0m (FY2016 Underlying EBIT A$41.3m) ̶ Almond crop volume of 14,100 MT (FY2016 14,200 MT) ̶ Average almond price of A$7.43/kg (FY2016 A$8.08/kg) ■ Acquired Jubilee Orchards near Waikerie, South Australia for A$

  12. Slide 12: Food Division Products

    Food Division Products Click to edit Master title style Sunsol 10+ Granola Lucky Entertainers launching in Asia December 2017 Asia‐specific variety launching December 2017 Sunsol Muesli Large Packsize launching in Asia December 2017 Click to edit Master text styles Asia‐targeted product launches 12

  13. Slide 13: Movement in SHV Group EBIT (A$M)

    Movement in SHV Group EBIT (A$M) Click to edit Master title style 49.8 8.5 Movement in SHV Group EBIT (A$M) FY16 Reported => FY16 Underlying => FY17 Reported 41.3 10.0 6.1 4.9 2.3 4.9 2.3 1.5 17.0 0.9 1.2 FY16 Reported Gain on Asset FY16 2017 Crop Prior Crop Orchard Rent Orchard Costs Processing Har

  14. Slide 14: Major Projects

    Major Projects Click to edit Master title style Project H2E (Biomass electricity cogeneration facility) ̶ No further delays – commissioning target end Q3 FY2018 ̶ Partly mitigates increasing energy cost pressure in the business ̶ Will improve long‐term economic value of kernel by‐product ̶ Cold comm

  15. Slide 15: Orchard Bunargool

    Click to editOrchard Bunargool Master title style Click to edit Master text styles 15 15

  16. Slide 16: Global Market Update

    Global ClickMarket to edit Update Master title style Demand ̶ Global demand remains strong. Rebasing of pricing has stimulated demand. ̶ US 2016 crop was a record ‐ 2.10 billion pounds (up 12% on prior year) ̶ US shipments last year were up 16% ̶ Current US YTD shipments and commitments are 49% of t

  17. Slide 17: Global Market Update - Tree Nut Pricing

    Global Market Update ‐ Tree Nut Pricing Click to edit Master title style Click to edit Master text Almonds arestyles currently the best value in the basket ‐ driving consumption 17 17

  18. Slide 18: 2018 SHV Crop Update

    2018 SHV Click toCrop edit Update Master title style Crop ̶ Sufficient chill hours between seasons ̶ Good but disrupted bloom ̶ Frost events in Northern and Central regions ̶ Weather outlook positive ̶ 2018 water secured (average price A$170/ML inclusive of Government charges and levies) ̶ SHV 2018

  19. Slide 19: Volume Growth

    Volume Growth Click to edit Master title style *Yields by tree age ‐ refer slide 42 Click to edit Master text styles Investment in almond orchards & processing assets largely complete = increase future earnings 19 19

  20. Slide 20: Management

    Management Click to editTeam Master title style Finance ̶ Paul Chambers (CFO & Company Secretary) resigned ‐ effective 8 November 2017 ̶ Vanessa Huxley appointed General Manager Finance & Company Secretary ̶ Brad Crump appointed CFO ‐ commenced 20 November 2017 Operations ̶ Bruce van Twest (GM Opera

  21. Slide 21: Key Take Outs

    Key Take Outs Click to edit Master title style ■ Fundamentals of the business & industry remain strong – Global consumption of plant protein & almonds continues to grow at 6‐8% per annum ■ Almond strategy is in place – 18,000 MT in 2020 building to 21,000MT in 2022 & 22,000MT in 2026 ■ Orchard healt

  22. Slide 22: Thank you

    Click to edit Master title style Thank you Please direct any queries to: Paul Thompson Brad Crump Andrew Angus Managing Director Chief Financial Officer 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 c

  23. Slide 23: Annual General Meeting November 2017

    Click to edit Master title style Annual General Meeting 24 November 2017 Consideration of The Financial Statements & Reports Click to edit Master text styles 23 23

  24. Slide 24: Resolution #1: Remuneration Report

    Click to edit Master title style Resolution #1: Remuneration Report Click to edit Master text styles 24 24

  25. Slide 25: Resolution #1: Remuneration Report

    Click to edit Master title style Resolution #1: Remuneration Report For: 31,176,547 Against: 1,625,444 Open‐Usable: 890,271 Click to edit Master text styles 25 25

  26. Slide 26: Resolution #2(a): Election of Paul Riordan

    Click to edit Master title style Resolution #2(a): Election of Paul Riordan Click to edit Master text styles 26 26

  27. Slide 27: Resolution #2(a): Election of Paul Riordan

    Click to edit Master title style Resolution #2(a): Election of Paul Riordan For: 30,478,743 Against: 1,758,663 Open‐Usable: 1,094,203 Click to edit Master text styles 27 27

  28. Slide 28: Resolution #2(b): Election of Fiona Bennett

    Click to edit Master title style Resolution #2(b): Election of Fiona Bennett Click to edit Master text styles 28 28

  29. Slide 29: Resolution #2(b): Election of Fiona Bennett

    Click to edit Master title style Resolution #2(b): Election of Fiona Bennett For: 30,499,322 Against: 1,782,725 Open‐Usable: 1,088,041 Click to edit Master text styles 29 29

  30. Slide 30: Discussion

    Click to edit Master title style Discussion Click to edit Master text styles 30 30

  31. Slide 31: Thank you

    Click to edit Master title style Thank you Please direct any queries to: Paul Thompson Brad Crump Andrew Angus Managing Director Chief Financial Officer 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 c

  32. Slide 32: Select Harvests - Financial History

    Select Harvests ‐ Financial History Click to edit Master title style Click to edit Master text styles Source: Company Data 32 32

  33. Slide 33: FY2017 Income Statement

    Click Income FY2017 to edit Master title style Statement Financial Result FY16 FY17 ■ FY17 Underlying EBIT1 A$17.0m (FY16 A$41.3m) (A$m) (A$m) Reported Result EBIT ‐ Reported 49.8 17.0 ■ Almond Division Underlying EBIT1 A$13.7m (FY16 A$36.1m) Interest (5.5) (5.0) NPBT 44.3 12.0 ̶ Volume flat (14,100

  34. Slide 34: FY2017 Balance Sheet

    FY2017 ClickBalance Sheet title style to edit Master Year Ending Balance Sheet Jun‐16 Jun‐17 ■ Debt at top end of targeted range (A$m) (A$m) Current Assets excl. Cash 154.1 139.1 ■ Net debt of A$104.4m (FY2016 A$25.5m) ̶ Gearing (net debt/equity) is 37.6% (FY2016 8.8%) Cash 1.4 1.1 Non‐Current Asset

  35. Slide 35: FY2017 Cash Flow

    Click to FY2017 editFlow Cash Master title style FY16 FY17 ■ 2016 crop realised in FY2017 at significantly lower values Cash Flow (A$m) (A$m) than the 2015 crop (realised in FY2016) EBITDA 62.4 31.8 Change in Working Capital 36.3 6.9 ■ Decreased working capital due to lower 2017 crop price Tax Paid

  36. Slide 36: Sensitivity EBIT

    ClickSensitivity EBIT to edit Master title style Assuming 2017 crop variables of: ■ Volume: 14,100 tonnes ■ Almond Price: A$7.43/kg ■ Exchange Rate (AUD/USD): 0.75 EBIT Sensitivity Impact on EBIT ($m) Volume +/-200 tonnes +/- A$1.5M Almond Price (A$/kg) +/- A$0.10/kg +/- A$1.4M Exchange Rate -/+ 1 c

  37. Slide 37: 5 Year Business Performance

    5 Year Business Performance Click to edit Master title style Underlying NPAT (A$ million) Planted/Bearing Almond Orchards (acres)* 59.4 Planted Acres Bearing Acres 18,500 16,521 13,824 7,490 13,311 11,943 12,319 Ha 10,022 9,443 9,295 6,689 27.9 Ha 4,987 22.9 21.6 5,597 4,987 Ha 5,389 Ha 4,835 Ha 4,0

  38. Slide 38: Sustainability

    Click Sustainability Safety, to edit Master&title style Diversity Safety SAFETY FY2016 FY2017 FY17 Outcome ■ Agriculture is one of Australia’s most dangerous industries ■ Select Harvests Zero Harm Safety and Wellbeing Strategy focus is to: LTIFR (“Lost Time Injury Frequency 18.4 15.1 ‐18% Rate”) ‐ P

  39. Slide 39: Almond Orchards - Our productive foundation

    Almond Orchards – Our productive foundation Click to edit Master title style Geographic diversity Secure access to diverse limits exposure to: water sources: − Weather − River Water − Disease spread − Aquifers − Insect infestation Positions the company to maximise harvest volume & reduce variance. E

  40. Slide 40: Select Harvests - Orchard Profile

    Select Harvests – Orchard Profile Click to edit Master title style Total Planted & Under Select Harvests Planted* Under Development Development Almond orchard portfolio (as at 30 June 2017) (as at 30 June 2017) (as at 30 June 2017) Acres Hectares Acres Hectares Acres Hectares Central region Company

  41. Slide 41: Select Harvests - Orchard Age Profile

    Select Harvests ‐ Orchard Age Profile Click to edit Master title style Click to edit Significant Master growth text styles & improvement occurred in SHV orchard portfolio in recent years ‐ acquisition, replants, greenfields 41 41

  42. Slide 42: Targeting an Above Average Yield Per Acre @ Maturity

    Targeting anedit Click to Above Average Master title Yield style Per Acre @ Maturity Harvest Volume (tonnes) per acre Harvest Volume (tonnes) per acre Year based in 1.2 Tonnes per Acre @ based on 1.3 Tonnes per Acre @ Maturity Maturity 1 0.0 0.0 2 0.0 0.0 3 0.3 0.3 4 0.5 0.5 5 0.8 0.8 6 1.0 1.0 7+ 1

  43. Slide 43: Select Harvests - Growing Costs

    Select Harvests – Growing Costs Click to edit Master title style SHV FY2017 Orchard Costs by Percentage Others 11% Labour 17% Havest 16% Fert & Chem 22% Fixed 8% Water Bee 11% 5% Energy 10% Labour Fert & Chem Bee Energy Water Fixed Havest Others Click to edit Master text styles Note: exclude orchard

  44. Slide 44: Useful Almond Industry websites

    Useful Almond Industry websites Click to edit Master title style Industry Associations • Californian Almond Board www.almondboard.com Industry Reports • US Crop Forecasts (Subjective, Objective) http://www.almonds.com/growers/resources/crop‐forecasts • Monthly Almond Position Reports http://www.almo

  45. Slide 45: Definitions & Explanations

    Definitions & Explanations Click to edit Master title style ■ Underlying Earnings Before Interest and Tax (“EBIT”) is a non‐International Financial Reporting Standards (“IFRS”) measure calculated by adding back interest expense and any non‐recurring adjustments to Profit Before Income Tax. ■ Underly

  46. Slide 46: Thank you

    Click to edit Master title style Thank you Please direct any queries to: Paul Thompson Brad Crump Andrew Angus Managing Director Chief Financial Officer 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 c

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