Slide 1: 1H FY2019 Half Year Results Presentation to 31 March 2019
Select Harvests Limited (ASX:SHV) 1H FY2019 Half Year Results Presentation to 31 March 2019 31 May 2019
Slide 2: Disclaimer & Basis of Preparation
Disclaimer & Basis of Preparation 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 does not take into account the in
Slide 3: 1H FY2019 Overview
1H FY2019 Overview ▪ SHV has changed its financial year end from 30 June to 30 September - this report is the 1st full 6-month period reported under the new timeline (1H FY2019) ▪ 50% of the Fair Value of the 2019 crop has been recognised in line with completed harvest activity ▪ Strong half year EB
Slide 4: Income Statement
Income Statement Income Statement $ millions 1H 2018* 1H 2019 Variance % * The 2018 Half Year Comparatives have not been audited – they are 50% of the Audited FY2018 Result. ▪ Revenue reflects sales of prior year crops and Food Division Almond Volumes MT 15,700 20,750 5,050 32.2% Almond Price Per Kg
Slide 5: Movement in SHV Group EBIT ($M)
Movement in SHV Group EBIT1 ($M) 34.9 17.0 * The 2018 Half Year Comparatives have not been audited – they are 50% of the Audited FY2018 Result. Increased volumes and higher pricing have led to an improved result 5
Slide 6: Balance Sheet
Balance Sheet Year Ending Balance Sheet $ millions 1H FY2018* 1HFY 2019 Current Assets excl. Cash 155.6 187.7 ▪ Increased current assets – working capital of $160.3m is higher Cash 0.4 1.3 due to value of 2019 unsold crop (inventory) – higher volume Non-Current Assets 352.2 370.2 Total Assets 508.1
Slide 7: Cash Flow
Cash Flow Cash Flow $ millions 1H FY 2019 ▪ Improved EBITDA1 of $38.5m - operational performance EBITDA1 38.5 Change in Working Capital (48.0) Tax Paid (2.8) ▪ Negative operating cashflow due to seasonal timing: Net Interest (2.1) Cash Flow From Operations (14.4) - First half cash outflows to grow 2
Slide 8: Almond Division
Almond Division Almond Division 8 Carina Farm Blossom 2018
Slide 9: Almond Division
Almond Division Almond Division $ millions 1H FY2018* 1H FY2019 EBIT 17.7 31.5 ▪ Crop volume increased to 20,750 tonnes (2018 Crop 15,700 tonnes) - up 32.2% - Impact of horticultural program, new tree health technology, greenfields contribution & frost fan investment - Favourable growing and harvest
Slide 10: Select Harvests – Orchard Age Profile
Select Harvests – Orchard Age Profile Growth and improvement occurred in SHV orchard portfolio in recent years - acquisition, replants, greenfields 10
Slide 11: Volume Growth
Volume Growth ▪ Select Harvests is now consistently yielding over 1.3 tonnes per acre – this adds considerable value in future years 23% higher than FY19 theoretical yield Investment in almond orchards ensures underlying organic earnings growth 11
Slide 12: Food Division
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Slide 13: Food Division
Food Division Food Division $ millions 1H FY2018 1H FY2019 EBIT 2.5 2.3 * The 2018 Half Year Comparatives have not been audited – they are 50% of the Audited FY2018 Result. ▪ Strong Industrial Sales - Industrial food sales strong - full pipeline from new Asian customers - Margins positive & SHV offe
Slide 14: Business Outlook
Business Outlook Bunargool Orchard Blossom 2018 14 Photo Carina Farm Blossom 2018
Slide 15: Select Harvests – in control of our destiny
Select Harvests – in control of our destiny Vision Values Strategic Priorities The pathway to achieving our vision Operational Focus What we do everyday Goal 15
Slide 16: Outlook
Outlook Industry Macro: - Plant-based market fundamentals (particularly almonds) remain strong - US 2019 crop moderate growth likely - US trade tensions likely to remain - Asian healthy snacking food market continues to grow Select Harvests: - Good tree health – well placed for 2020 crop - Water str
Slide 17: Almond Outlook
Almond Outlook USA ▪ August 2018 to April 2019 YTD Shipments Update • US Domestic shipments are up 1.6% • 5 of the last 7 months were record monthly shipments • US Export shipments are down 2.9% • China, which is down 33% • Taken up by other markets • Uncommitted Inventory down 15% • Carryover forec
Slide 18: 2H FY2019 Top Priorities
2H FY2019 Top 10 Priorities 1. 2020 Crop Horticultural Program – Ensure optimal tree health 2. Successfully Deliver The 2019 Crop – Maximise price and ensure quality standards 3. Cost Reductions - Continue to reduce cost per kg across all production stages 4. Mitigate Water Cost - With increasingly
Slide 19: Thank you
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 can be found on the Select Harvest
Slide 20: Select Harvests - Financial History
Select Harvests - Financial History 2006 2007 2008 2009 2010 2011 2012 2013 2014* 2015 2016 2017 2018 SHV Historical Summary Units Total Revenue (A$M) 218.0 229.8 224.8 248.7 239.1 250.0 251.3 191.1 188.3 223.6 286.2 242.1 210.2 EBIT (A$M) 38.4 40.5 27.1 26.8 26.0 22.6 19.6 37.7 31.3 89.6 41.3 17.0
Slide 21: Almond Orchards – Our productive foundation
Almond Orchards – Our productive foundation 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. Enables sequential progression of
Slide 22: Select Harvests – Orchard Profile
Select Harvests – Orchard Profile Select Harvests Total Planted Almond orchard portfolio (as at 31 March 2019) Acres Hectares Central region Company Owned 4,183 1,693 Leased 3,422 1,385 Total 7,605 3,078 Northern Region Company Owned 1,797 727 Leased 3,017 1,221 Total 4,814 1,948 Southern Region Com
Slide 23: Targeting an Above Average Yield Per Acre @ Maturity
Targeting an Above Average Yield Per Acre @ Maturity Harvest Volume (tonnes) per acre Harvest Volume (tonnes) per acre Year based on 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+ 1.2 1.3 Note: Biennial Nature of
Slide 24: Tree Nut Pricing
Tree Nut Pricing Almonds are currently the best value in the basket - driving consumption 24
Slide 25: Growing Costs
Growing Costs 2019 vs 2018 Crop Costs Per Kg ▪ Overall 2019 Crop costs per Kg have reduced by 8.6% ▪ Yield delivery remains the top priority ▪ Focus continues from 2018 reductions across all Horticultural expenditure categories ▪ New technology in the processing centre has increased throughput rates
Slide 26: Almond Market Outlook – US Shipments April 2019
Almond Market Outlook – US Shipments April 2019 US Export Shipments US Domestic Shipments US Total Shipments Last Year This Year Growth Growth Last Year This Year Growth Growth Last Year This Year Growth Growth (million lbs) (million lbs) (million lbs) (%) (million lbs) (million lbs) (million lbs) (
Slide 27: Almond Exports to China
Almond Exports to China Data Source: Almond Boards of Australia and California Australian almond exports to China increased significantly in the 2018 Marketing Year 27
Slide 28: Useful Almond Industry websites
Useful Almond Industry websites Industry Associations ▪ Californian Almond Board www.almondboard.com ▪ Almond Board of Australia www.australianalmonds.com.au Industry Reports ▪ US Crop Forecasts (Subjective, Objective) http://www.almonds.com/growers/resources/crop-forecasts/tc-NASS-Crop-and-Acreage-