Scales Corp. Ltd. · NZX:SCL
Scales — Shareholder Meeting (June 2023)
42 slides from Scales's shareholder meeting presentation, Jun 7, 2023
Slide 1: Scales Corporation 2023 Annual Shareholders' Meeting
SCALES CORPORATION LIMITED Bringing Nutrition to the World 2023 Annual Shareholders’ Meeting 7 June 2023
Slide 2: Agenda
1. Welcome and Chair’s Review 2. Managing Director’s Review a) Year in Review b) Sustainability Update c) Business Update d) Outlook 3. Ordinary Resolutions 4. Voting and Questions Scales – 2023 Annual Shareholders’ Meeting 2
Slide 3: Shareholder and proxyholder voting
Shareholder and proxyholder voting • Once the voting has been opened, the resolutions and voting options will allow voting • To vote, simply click on the ‘Vote’ tab, and select your voting direction from the options shown on the screen • You can vote for all resolutions at once or by each resolution
Slide 4: Shareholder and proxyholder Q&A participation
Shareholder and proxyholder Q&A participation • Written Questions: • If you have a question to submit during the meeting, please select the ‘Q&A’ tab on the right half of your screen at anytime • Type your question into the field and press send • Your question will be immediately submitted • Help: •
Slide 5: 1. Welcome and Chair's Review
1. Welcome and Chair’s Review
Slide 6: Welcome to all shareholders and stakeholders
• Welcome to all shareholders and stakeholders, both in person and online • Delighted to host my first Scales ASM as Chair following my appointment at the end of April • Would like to recognise the leadership and support of Tim Goodacre: • Appointed as Director of Mr Apple in 2012, joined Scales’ Bo
Slide 7: Strong 2022 Group performance driven by record Global Proteins and Logistics results
Strong 2022 Group performance driven by record Global Proteins and Logistics results ✓ Employees continue to be top priority, with several employee engagement platforms and activities developed or re-engaged ✓ Further outperformance from Global Proteins complemented by strategic investments made in
Slide 8: Indebted to our teams for their efforts
Indebted to our teams for their efforts • We would like to recognise the responsiveness, innovation, collaboration and support from our teams throughout 2022 and the start of 2023 • We would also like to reiterate the importance of our RSE workers within our teams, whose remarkable skills and commit
Slide 9: Progress on the Board refreshment and succession programme
Progress on the Board refreshment and succession programme • Initial phase of programme completed with the appointment of 2 new Directors to replace the retiring Tim Goodacre and Mark Hutton • Miranda Burdon appointed as Independent Non-Executive Director: ▪ Effective 31 August 2022 ▪ Brings extensi
Slide 10: 2. Managing Director's Review
2. Managing Director’s Review
Slide 11: Managing Director's Review agenda
a) Year in Review b) Sustainability Update c) Business Update d) Outlook Scales – 2023 Annual Shareholders’ Meeting 11
Slide 12: a) Year in Review
a) Year in Review
Slide 13: Cyclone Gabrielle impact on Hawke's Bay orchards
Many people experienced significant loss or disruption as a result of this event. The Hawke’s Bay community, its people and its culture, are an integral part of Scales. Extensively damaged • Commitment of $250,000 in donations to the recovery Moderately damaged • Tailored assistance provided to staf
Slide 14: 2022 key figures
$619.2m $27.0m 13.5% 19.0 cents record revenue net cash ROCE dividends declared per (2021: $514.6m) (2021: $82.1m) (2021: 13.8%) share in respect of FY22 First 2 Group-wide carbon Leadership programmes footprint completed custom built 158,595 MT 27,580 TEUs petfood ingredients sold* of ocean freight
Slide 15: Underlying NPAT, EBITDA and Revenue
Underlying NPAT Underlying EBITDA Revenue Attributable to Shareholders Historic results are unadjusted for businesses that have been sold or acquired. 2018 results have not been restated for the effects of NZ IFRS 16 Leases. Scales – 2023 Annual Shareholders’ Meeting 15
Slide 16: Excellent results, particularly from Global Proteins and Logistics
Excellent results, particularly from Global Proteins and Logistics • Reported NPAT Attributable to Shareholders of $19.4m, down 28% (2021: $26.9m) • Underlying NPAT Attributable to Shareholders of $27.6m, down 7% (2021: $29.8m) • Underlying EBITDA of $77.9m, up 6% (2021: $73.8m) • Revenue of $619.2m
Slide 17: Divisional results: Global Proteins, Horticulture, Logistics
Global • Another outstanding performance, with record results for both revenue and profitability Proteins • Strong market conditions and new product development led to improved volumes, mix and margin • Contribution from Fayman following investment Horticulture • A solid result in a year with signif
Slide 18: Global Proteins, Horticulture, Logistics earnings
Global Proteins Horticulture Logistics Due to the change in strategic focus of Global Proteins, Profruit earnings have been reclassified to Horticulture 2018 results have not been restated for the effects of NZ IFRS 16 Leases. Scales – 2023 Annual Shareholders’ Meeting 18
Slide 19: Strong financial position
Strong financial position • Movement in capital employed* primarily reflects: ◦ Our investment in Fayman ◦ An increase in working capital due to an unseasonal increase in Horticulture receivables as a result of market turbulence and a growth in inventory within Global Proteins consistent with its re
Slide 20: b. Sustainability Update
b. Sustainability Update
Slide 21: Update on our Sustainability strategy
Update on our Sustainability strategy Future operating Focus areas Current assessment Strategy Business delivery environment Review goals Refine materiality Baseline Horizon scans Pathway analysis and risks areas measurement Business objective and project setting • Horizon scan • Reviewed materialit
Slide 22: Excellent progress made on our Sustainability initiatives
Excellent progress made on our Sustainability initiatives • Built and communicated our Employee Value Proposition (EVP) to key stakeholders • Custom built two leadership programmes that are currently being rolled out: Leading through Others (Senior Managers) and Emerging PEOPLE Leaders (Assistant Ma
Slide 23: Scales workforce at a glance
>600 >30 46 years permanent staff members operational sites longest serving employee 37% ~1,450 28% permanent female staff RSE workers female senior leadership / Scales wide management staff Scales – 2023 Annual Shareholders’ Meeting 23
Slide 24: c. Business Update
c. Business Update
Slide 25: Significant growth from strategic investments and petfood demand
Significant growth as a result of strategic investments and ongoing petfood market demand • 46% increase in revenue • 80% increase in Underlying EBITDA • Increased profitability reflects: ◦ Improvements in operational efficiencies at processing sites following development and investment ◦ Impact of
Slide 26: Global Proteins division attractive attributes
Scales’ Global Proteins division is being developed to benefit from the following attractive attributes • Resiliency to market cycles – we believe that petfood and edible by-product proteins are well Value of Global Petfood Market (US$b) insulated against changes in the macroeconomic environment 4.6
Slide 27: Global Proteins: operations
We have global aspirations for our Global Proteins division New Zealand Australia Name Fayman International / Meateor Name Meateor NZ Australia Ownership 50% Ownership 50% / 33% Activities Petfood ingredients Activities Edible proteins and petfood ingredients Processing sites 2 Key Species Lamb, bee
Slide 28: Our gameplan
Our gameplan • Future investment will be prioritised towards Global Proteins given its strong growth prospects and above average return on investment Local partnerships – access to supply, new • When entering a new market, we use partnership models with existing industry players who have sales chann
Slide 29: Solid result in a year with severe market disruption
Solid result in a year with severe market disruption Mr Apple Own Export Volumes (TCE 000s) • Revenue of $228.9m • Underlying EBITDA of $17.0m • Slight decrease in Mr Apple total own-grown export volumes • Earnings and volumes impacted by lockdowns, lower volumes, higher shipping costs and labour av
Slide 30: Strategic value of Logistics accompanied by strong growth
Strategic value of division accompanied by strong growth • 51% increase in revenue: ◦ Principally as a result of changes in market freight costs • 33% increase in Underlying EBITDA • Over 50% increase in airfreight volumes offset a minor decline in ocean freight volumes (in part due to lower horticu
Slide 31: d. Outlook
d. Outlook
Slide 32: Group update
Group update • Due to the wide ranging impacts of Cyclone Gabrielle on Hawke’s Bay: ◦ Underlying NPAT Attributable to Shareholders Guidance lowered in early April to a range of $14m to $19m from original Guidance of $23.5m to $28.5m • Global Proteins has commenced the year well: ◦ Shelby trading in
Slide 33: Divisional outlook
Global Proteins • Taking advantage of the opportunities in the strong and growing global petfood market • Investigating opportunities to develop our investments, through Fayman, in the edible proteins by-product market Horticulture Mr Apple Pick and Packout • Harvest completed with total pick of ~3.
Slide 34: 3. Ordinary Resolutions
3. Ordinary Resolutions
Slide 35: Auditor's remuneration resolution
That the Board is authorised to fix the auditor’s remuneration for the coming year Scales – 2023 Annual Shareholders’ Meeting 35
Slide 36: Re-election of Nick Harris
Having retired by rotation, that Nick Harris be re-elected as a Non-Executive Independent Director • Nick’s current external roles include: ◦ Managing Director of Harris Farms ◦ Managing Director of Glenturret Farm ◦ Shareholder and Director of a number of other private companies Scales – 2023 Annua
Slide 37: Election of Miranda Burdon
Having been appointed during the year by the Board and holding office only until the Annual Meeting, that Miranda Burdon be elected as a Non-Executive Independent Director • Miranda’s current external roles include: ◦ Chair of Meadow Mushrooms ◦ Chair of Emerging Proteins NZ ◦ Chair of Live Ocean ◦
Slide 38: Election of Mike Petersen
Having been appointed during the year by the Board and holding office only until the Annual Meeting, that Mike Petersen be elected as a Non-Executive Independent Director • Mike’s current external roles include: ◦ Director of ANZCO Foods ◦ Director of Kelso Genetics Limited ◦ Chair of Nui Markets Li
Slide 39: 4. Voting and Questions
4. Voting and Questions
Slide 40: Shareholder and proxyholder Q&A participation
Shareholder and proxyholder Q&A participation • Written Questions: • If you have a question to submit during the meeting, please select the ‘Q&A’ tab on the right half of your screen at anytime • Type your question into the field and press send • Your question will be immediately submitted • Help: •
Slide 41: Scales Corporation Limited 2023 Annual Shareholders' Meeting
Scales Corporation Limited 2023 Annual Shareholders’ Meeting
Slide 42: The information in this presentation has been prepared by Scales Corporation Limited with due
The information in this presentation has been prepared by Scales Corporation Limited with due care and attention. However, neither Scales Corporation Limited nor any of its directors, employees, shareholders nor any other person shall have any liability whatsoever to any person for any loss (includi