Limoneira Co · NASDAQ:LMNR
Limoneira — Investor Presentation (October 2022)
39 slides from Limoneira's investor presentation, Oct 20, 2022
Slide 1: A Company in Transition
A Company in Transition October 2022
Slide 2: Disclosure. Forward-Looking Statements
2 Disclosure. Forward - Looking Statements This presentation contains forward - looking statements, including guidance for fiscal years 2022 and beyond, within the meaning o f Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. T
Slide 3: Limoneira agricultural and development company overview
Limoneira is an agricultural and development company that seeks to not only maximize value for its customers and shareholders, but to enhance its legacy as a steward of both its natural and human resources. To that effect, Limoneira employs sustainable practices in all aspects of operations.
Slide 4: Founded in 1893, Limoneira Well-Positioned for Continued Global Expansion
8,500 U.S. FRUIT - BEARING ACRES 1 4 Founded in 1893, Limoneira is Well - Positioned for Continued Global Expansion and Move to an Asset Light Business Model. Year - round global supplier of citrus that eliminates seasonality for customers Real Estate Development Project expected revenue during the
Slide 5: Experienced Senior Management Team
Experienced Senior Management Team. Harold Edwards President / CEO Mark Palamountain Chief Financial Officer John Carter Vice President of Sales 32 years industry experience Joined Limoneira in 2003 Member of one of the farming families associated with the Company over its long history 24 years fina
Slide 6: Updated Strategic Objectives and Priorities
2 3 4 1 6 Updated Strategic Objectives and Priorities. Expanding One World of Citrus ™ Asset Light Business Model Improving ESG Efforts Unlocking Market Value of Non - Strategic Assets Real Estate Developments
Slide 7: Expected Outcomes of Updated Strategic Objectives and Priorities
Reduce debt and right - size the balance sheet 7 Expected Outcomes of Updated Strategic Objectives and Priorities. Increase EBITDA and Dividend Per Share Transition One World of Citrus™ to an “asset light” model Improve Return on Invested Capital (ROIC) Improve consistency of earnings 1 4 3 5 6 Stre
Slide 8: Future Conversion of Select Non-Core Land
Profits from sale of non - essential assets and real estate development will be used to reduce existing debt, fund acquisitions, as investment to increase farming efficiencies and to expand packing capabilities 8 Future Conversion of Select Non - Core Land.
Slide 9: Future Asset Monetization: $150 Million of Near-Term Asset Sales
9 Future Asset Monetization. $150 Million of Near - Term Asset Sales Have Been Identified: Commercial Property in Harvest at Limoneira Close expected on October 31, 2022 Oxnard Lemon Property Close expected on October 31, 2022 Santa Maria Properties Close expected on December 31, 2022 Northern Agric
Slide 10: Three Primary Drivers Fueling Long-Term Growth
10 Three Primary Drivers Fueling Long - Term Growth. Non - Core Revenue Stream Citrus Real Estate Avocados Identified $150M of near - term assets for sale Packaging Line Efficiencies, Productivity, and International Investment To Drive Stable Earnings Growth and Provide Operational Leverage 5 Year P
Slide 11: Expanding One World of Citrus
Expanding One World of Citrus 1 ™
Slide 12: Year-round global supplier of citrus that eliminates seasonality
Year - round global supplier of citrus that eliminates seasonality for customers. 12 Lemons Avocados Oranges Global End Markets DAYS PER YEAR DAYS PER WEEK HOURS PER DAY 300k MEXICAN & SOUTH AFRICAN SOURCED GROWERS 365 / 24 / 7 6.2M CARTONS OF FRESH LEMONS SOLD IN 2021 1 Billion Lemons
Slide 13: Our three pronged operating model
Our three pronged operating model helps fulfill end customer’s fruit needs 13 Providing a Critical Link Between Highly Fragmented Citrus & Avocado Growers and Diverse End Markets. Growing Packing Marketing / Distribution Fruit grown , packed and marketed / distributed by LMNR 2022 Source Volume: Tar
Slide 14: Move to Increase Asset Light Volume Expected to Lead to Margin Expansion
14 Move to Increase Asset Light Volume Expected to Lead to Margin Expansion. Inflationary cost pressure Oversupply, commodity pricing
Slide 15: Asset Light Volume Margin Expansion
15 Move to Increase Asset Light Volume Expected to Lead to Margin Expansion. Grower Partner packing and marketing / distribution margin is $2.00 per carton Agency / Brokerage marketing / distribution margin is 8% of sale price, with target of $1.50 to $2.50 per carton margin Grower Partner and Agenc
Slide 16: A Vertically Integrated Player Within a Highly Fragmented Space
Increased operating leverage and flexibility Enhanced customer service and satisfaction Higher growth and margins High - quality products Integrated farm - to - customer supply chain Low - cost production Diverse global sourcing and distribution network Superior product mix Global scale and customer
Slide 17: A Hub of Key Services to the Global Lemon Industry
Limoneira processes, packages, ships, markets and distributes lemons from its farms and other growers. 17 A Hub of Key Services to a Growing Portion of the Global Lemon Industry. 4.2 M USA LEMON CARTON ACTUALS FY21 2.1 M 2.1 M 2.0 M International* 1.2M 800k Limoneira grown lemons Grower partners usi
Slide 18: Highly Automated Packing Platform
18 Transformed Our Packing Facility Into a Highly Automated Packing Platform. Current Packing Facility $29 M was spent modernizing and streamlining facilities to be state - of - the - art (in 2016) 14% more lemons packed 25% increase in third - party packings Now able to grow through additional pack
Slide 19: Expect Long-Term Increase in Global Demand for Fresh Citrus
19 Expect Long - Term Increase in Global Demand for Fresh Citrus. $94 $104 $150 $138 $143 $143 2017 2018 2019 2020 2021 LTM 3Q22 LEMON REVENUE ORANGE & SPECIALTY CITRUS REVENUE $12 $14 $11 $14 $12 $14 2017 2018 2019 2020 2021 LTM 3Q22 7 % of 2021 agricultural revenue 89% of 2021 agricultural revenue
Slide 20: Expect Long-Term Growth in Avocados
$10 $7 $5 $9 $7 $17 2017 2018 2019 2020 2021 LTM 3Q22 20 Expect Long - Term Growth in Avocados. REVENUE Dollars in Millions 4% of 2021 agricultural revenue 2.2% U.S. Market Share one of the largest growers 800 planted acres 800 current producing acres 98% Hass avocados Exploring packing and marketin
Slide 21: Unlocking Market Value of Balance Sheet Assets
2 Unlocking Market Value of Balance Sheet Assets
Slide 22: $150 Million of Near-Term Asset Sales Identified
22 $150 Million of Near - Term Asset Sales Have Been Identified. AS OF AUGUST 31, 2021 ACRES FMV 1 NET BOOK VALUE Real estate assets 600 $100M – $150M $87M Agricultural assets (land, buildings, orchards, water) 15,400 $475M – $600M $245M Other assets $25M – $30M $19M Less estimated current debt ($13
Slide 23: Holding Significant Valuation in Ownership Over Water Rights
23 Holding Significant Valuation in Ownership Over Water Rights. Water Assets Water rights, usage rights, and water pumping rights associated with Limoneira land ~ 28,000+ ACRE FEET OF OWNED WATER RIGHTS $10k – $40k PER ACRE FOOT Range of recent water rights sales in CA/AZ Substantial investments ma
Slide 24: Premium Land Owned in California, Arizona, Chile, Argentina
24 Premium Land Owned in Central/Southern California, Arizona, Chile, Argentina, and a Variety of Commercial Properties. Land in Chile & Argentina Office Buildings District I, II & III Packinghouses Premium land Commercial property Premium land and commercial property assets La Serena, Chile Jujuy,
Slide 25: Real Estate Developments
LIMONEIRA Real Estate Developments
Slide 26: Diversified Revenue Stream Includes Monetizing Non-Core Agribusiness Land
Diversified Revenue Stream Includes Monetizing Non - Core Agribusiness Land. 26 Limoneira entered a partnership with the Lewis Group of Companies to develop “Harvest at Limoneira” — a residential and commercial real estate project. Nationally Recognized Homebuilder Partners Partnership cash distribu
Slide 27: Harvest Medical Pavilion
27 Harvest Medical Pavilion. EAST AREA 2 STRATEGICALLY LOCATED CLOSE TO HARVEST AT LIMONEIRA DEVELOPMENT PROJECT Provides upside to initial expected cash flow of $95 M + 32.5 ACRES OF EAST AREA 2 INTENDED FOR MEDICAL CAMPUS LOT 1 TO BE DEDICATED MEDICAL OFFICE BUILDINGS LOT 2 TO AN ACUTE CARE HOSPIT
Slide 28: Harvest at Limoneira Cash Flow Projections
28 Harvest at Limoneira .. CURRENT HARVEST AT LIMONEIRA CASH FLOW PROJECTIONS Fiscal Years 2022E 2023E 2024E 2025E 2026E Total Annual Projected Distribution $8M $15M $27M $30M $15M PROJECT STATUS Cash Flow Potential Approximately $115M over the life of the project (of which $20M has already been rec
Slide 29: Limoneira
LIMONEIRA i) i= iS) = nT O ” Wu
Slide 30: Continued Commitment to Improve ESG Scores
30 Invest in regenerative agricultural practices Invest Focus on sustainability Focus Evolve governance structure Evolve Limoneira remains committed to enhancing and improving ESG scores Continued Commitment to Improve ESG Scores. Expand Expand relationship with Agromin
Slide 31: Evolution of Board Structure and Composition
31 Evolution of Board Structure and Composition to Enhance Effectiveness. Evolving Governance Structure 1 2 3 4 New committee leadership to affect positive change Key Milestones Establishing best governance practices 1 2 3 4 5 Unanimous board approval of strategic plan and ESG initiatives Elizabeth
Slide 32: Innovating New Methods of Protecting Water
Limoneira addresses water scarcity and potential negative impacts on community water resources by maintaining a careful balance between water demand and supply — and by driving efficiencies in water use. 32 Innovating New Methods of Protecting Water. Moisture sensors determine when trees need water
Slide 33: Commitment to ESG is Deeply Embedded in Culture
Limoneira has been treading lightly on the land since its founding 129 years ago — long before sustainability entered the modern lexicon. 33 Commitment to ESG is Deeply Embedded in Culture. Investment in cutting - edge water management technology reduces water consumption in drought - prone enviornm
Slide 34: Investing in the Power of People
34 Investing in the Power of People. One of the first agricultural employers to offer on - campus housing to their workers Donated over $2.5 million to support schools, community and industry organizations in Ventura, Santa Barbara, San Luis Obispo, and Tulare counties, and Yuma, Arizona Workforce H
Slide 35: Financial Performance & Outlook
Financial Performance & Outlook 6
Slide 36: Driving DPS Growth Through Increased Revenue and Operational Efficiencies
Driving DPS Growth Through Increased Revenue and Operational Efficiencies. $112 $121 $129 $171 $165 $166 2016 2017 2018 2019 2020 2021 REVENUE ($M) $0.20 $0.22 $0.25 $0.30 $0.30 $0.30 2016 2017 2018 2019 2020 2021 DIVIDENDS PER SHARE Annual dividend has increased by over the past 5 years 50% +8.2% C
Slide 37: Positioned to Realize Financial Growth in FY 2022
$112 $121 $129 $171 $165 $166 $178 2016 2017 2018 2019 2020 2021 LTM 3Q22 REVENUE ($M) $20 $19 $22 $4 $7 $9 2016 2017 2018 2019 2020 2021 LTM 3Q22 EBITDA ($M) 37 Positioned to Realize Financial Growth in FY 2022. The Company expects cartons of fresh lemons AND pounds of avocados in FY22 4.5 - 5.0M 6
Slide 38: Positioned for Long Term Profitable Growth
38 Positioned for Long Term Profitable Growth. Projections THE COMPANY EXPECTS TO RECEIVE from Harvest at Limoneira during next five fiscal years, beginning in FY22. $95 M + 1,000 Additional acres of non - bearing lemons estimated to become full bearing over the next four years acres expected to bec
Slide 39: Q&A
Q&A