Slide 1: 1H FY2022 Half Year Results Presentation
1H FY2022 Half Year Results Presentation 27 May 2022 Paul Thompson Managing Director & CEO Brad Crump CFO & Company Secretary
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: Business Performance
Business Performance Z SELECT HARVESTS es Gesu)
Slide 4: Operating Performance
Operating Performance Harvest has been hampered by ongoing rain events, preventing access to the orchard and providing insufficient on orchard drying time. Approximately 4,000MT of kernel product remain to be harvested. Almond Sales Processing Water With the global market starting to become Over 38%
Slide 5: Almond Price
Almond Price The Industrial Value-Add Almond Business was impacted by a higher raw material input cost, with higher value prior year almond crops used in production. Almond Prices (US$/Lb) Source: Stratamarkets 5
Slide 6: Triple Bottom Line Focus
Triple Bottom Line Focus Sustainability is a core value underpinning our business strategy and centres across three platforms: Planet, People and Profit. 1. ROCE: Return on Capital Employed. WACC: Weighted Average Cost of Capital 6
Slide 7: 1H FY2022 Financial Overview
1H FY2022 Financial Overview A lower almond price has impacted earnings. Without an improvement in almond pricing, it is anticipated that the second half result will be similar to the first half result. Reported Reported Earnings per Share (Basic) $2.0m $15.8m 1.7 cents Michael Iwaniw - Chairman Due
Slide 8: 1H FY2022 Operating Overview
1H FY2022 Operating Overview Continue to maintain better than industry standard yields, with a record almond crop estimated for 2022. Growing costs remain well controlled and per kg are lower overall due to the decreased water costs. Almond Crop Fair Value Almond Price Currency 29,630 MT $6.64/kg $0
Slide 9: 1H FY2022 Results in Context
1H FY2022 Results in Context Focused on factors within our control such as almond volume, quality and production cost. Almond Volume (MT) Fair Value Almond Price ($/kg) Total Almond Production Cost ($/kg) NPAT ($m) 5 Year Average 9
Slide 10: Income Statement
Income Statement Result impacted by the lower almond price $ millions ■ Decrease in revenue due to lower fair value pricing, shipment and (except where indicated) 1H FY2022 1H FY2021 Variance % Change logistics related delays in key markets. Almond volume (Mt) 29,630 28,250 1,380 4.9% ■ 1H FY2022 EB
Slide 11: EBIT Movement
EBIT Movement 1H FY2022 EBIT benefitted from additional volume and a higher almond price. Higher growing costs were offset by lower water costs. Movement in EBIT from Continuing Operations ($m) 11
Slide 12: Balance Sheet
Balance Sheet Balance sheet remains in a strong position, with low net bank debt. The market value of the company’s assets is significantly higher than book value. ■ Inventory levels higher than 1H FY2021, due to a slower sales program and reduced 2022 inshell sales. Inventory will be unwound as the
Slide 13: Cash Flows
Cash Flows Operating cash flows remain in line with 1H FY2021 $ millions ■ Operating cash flows impacted by: (except where indicated) 1H FY2022 1H FY2021 − Ongoing delays in early shipments EBITDA1 15.8 12.9 Change in working capital (9.5) (6.6) − Lower levels of inshell production (normally commenc
Slide 14: Triple Bottom Line Focus
Triple Bottom Line Focus Sustainability is a core value underpinning our business strategy and centres across three platforms: Planet, People and Profit. 1. ROCE: Return on Capital Employed. WACC: Weighted Average Cost of Capital 14
Slide 15: Health, Safety and Wellbeing
Health, Safety and Wellbeing Focused towards achieving Zero Harm, with annual targets to improve YoY performance. Injury Frequency Rate Strategic Priorities ■ COVID-19 management and response plan ■ Hazard identification and eradicating risks before an incident occurs ■ Process improvement and syste
Slide 16: People & Culture Update
People & Culture Update ■ SHV sponsored 23 Community based organisations, continuing to support important regional community organisations and helping to build our Employer Brand within our regional communities. ■ We partnered with SuniTAFE to build an SHV custom-tailored Leadership Development Prog
Slide 17: Triple Bottom Line Focus
Triple Bottom Line Focus Sustainability is a core value underpinning our business strategy and centres across three platforms: Planet, People and Profit. 1. ROCE: Return on Capital Employed. WACC: Weighted Average Cost of Capital 17
Slide 18: Almond Growing a Closed Loop
Almond Growing a Closed Loop 30,000MT 130,000MT Compost returned Biomass produced by our orchards Almond trees in California absorb to orchards more C02 than they produce during their lifetime1 9,262 HA Orchards Almonds provide a very high Fruit Forests nutritional value, ranking the highest amo
Slide 19: Environmental Policy Commitment
Environmental Policy Commitment Water stewardship Carbon neutrality Objective is to maximise the value per megalitre We recognise that greenhouse gas emissions by intensive irrigation management practices. represent a significant part of our environmental 100% of our orchards use drip irrigation, so
Slide 20: Bee Stewardship
Bee Stewardship Our policy for optimum bee health and Research findings by CSIRO* pollination outcomes: ■ At the end of each day, ■ To supply alternative ■ If a crop protectant spray is flowers on trees far from forage sources for bee required, the choice of product hives had more pollen arrivals wh
Slide 21: Co-Waste Projects
Co-Waste Projects Select Harvests is undertaking three co-waste projects to increase sustainability and generate positive commercial outcomes for the business. Almond Hull Waste Ash Almond Hull Fly Ash to Energy to Compost to Fertiliser to Liquid Fertiliser Select Harvests co-generation Waste ash by
Slide 22: Market Outlook
Market Outlook Z SELECT HARVESTS es Gesu)
Slide 23: Almond Pricing and Market Conditions
Almond Pricing and Market Conditions The market outlook is becoming more positive, demand is returning post COVID-19 impacts and global inventories are returning to a more balanced position. Almond Prices (US$/Lb) Market Conditions ■ Global almond prices reduced significantly in the first quarter of
Slide 24: Strategy and 2H FY2022 Priorities
Strategy and 2H FY2022 Priorities
Slide 25: Select Harvests Strategy
Select Harvests Strategy Select Harvests – in control of our destiny 25
Slide 26: 2H FY2022 Priorities
2H FY2022 Priorities Continue to execute on our growth strategy, underpinned by a world class portfolio of almond assets. 1. Safety and Wellbeing - Ensure safety and wellbeing of all stakeholders 2. Horticultural Program - Complete 2022 harvest and invest in 2023 crop 3. Input Security - Secure crit
Slide 27: Thank You
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 can be found on the Select Harve
Slide 28: Appendix
Appendix Z SELECT HARVESTS es Gesu)
Slide 29: Current Year Almond Crop Sensitivities
Current Year Almond Crop Sensitivities 38% of SHV’s 2022 total crop has been processed to date, with 51% contracted for sale. Crop export sales fully hedged against the USD at $0.72. ■ A portion of the current year almond crop is classified as a biological asset and valued in accordance with AASB 14
Slide 30: Crop Costs
Crop Costs 2023 growing costs are expected to increase predominantly due to the higher cost of fertiliser and agricultural chemicals. 2022 Crop Costs by Type Costs per Kg: 2021 vs. 2022 Crop 30
Slide 31: Orchard Portfolio
Orchard Portfolio One of the world’s largest almond growers, with a geographically diverse 9,262 hectare orchard portfolio. Select Harvests Orchard Map Benefits of Geographic Diversity & Scale ■ Geographic diversity limits exposure to: − Weather − Disease spread − Insect infestation ■ Positions the
Slide 32: Volume Growth
Volume Growth Our investment in greenfield developments and orchard acquisitions will underpin long term growth. Select Harvests Theoretical Harvest Volume (MT) 1. Assumes a 3.3MT per ha (1.35MT per acre) mature yields and immature yields based on the average of the 2019, 2020 and 2021 crops 2. Assu
Slide 33: Planted Hectares
Planted Hectares 2.6x growth in planted hectares since 20121. Select Harvests Orchard Profile Select Harvests Planted Almond Hectares1 Select Harvests Total Planted Almond orchard portfolio (as at 30 September 2021) hectares acres 9,262 9,262 Central Region Company Owned 1,693 4,183 20% Piangil Orch
Slide 34: Orchard Age Profile
Orchard Age Profile Select Harvests weighted average orchard age is 13.5 years, with 100% of current planted acres cash generative1. Age Profile of Select Harvests Almond Orchards1 (100% of current planted hectares are cash generative) 25% 71% 4% Planted orchards are Planted orchards in economic swe
Slide 35: Australian Water and Climate Update
Australian Water and Climate Update Water prices should continue to be below long-term averages heading into FY2023, with wetter than average seasonal conditions and higher than average collective basin storage levels. Water Prices Climate Outlook ■ The 2021/22 water season has seen favourable weath
Slide 36: Californian Water and Climate Update
Californian Water and Climate Update 98% of California remains in Severe Drought, with 60% of the state in Extreme Drought. The combined storage level of California’s major reservoirs is only at 48% of total capacity. California Drought Monitor California Reservoir Storage Levels (as of May 21, 2022
Slide 37: Water Footprint & Nutritional Value
Water Footprint & Nutritional Value While almonds have a relatively high-water footprint, they provide a very high nutritional value, ranking amongst the highest amongst all crops. Major Californian crops ranked by water footprint and nutritional value Source: Fulton, J., Norton, M. and Shilling, F.
Slide 38: Water Footprint & Economic Value
Water Footprint & Economic Value The direct economic benefits of almond production based on market sales are larger than any other Californian crop. Major Californian crops ranked by water footprint and farm gate price Source: Fulton, J., Norton, M. and Shilling, F. (2019). Water-indexed benefits an
Slide 39: Water Use Efficiency of Australian Almonds
Water Use Efficiency of Australian Almonds Almonds have the highest calories per ML of water used, the highest protein per ML of water used and the highest dollars generated per ML of water used. Calories per ML Kg Protein per ML 600,000 20.00 18.00 500,000 16.00 14.00 Protein/ML (kg) 400,000 12.00
Slide 40: Almond Industry Carbon Facts from California
Almond Industry Carbon Facts from California Almond trees in California absorb more C02 than they produce during their lifetime. Total Biomass produced by Almond crop in California per Ha during the life cycle = 181MT Kernel + 220 MT Hull & shell + 40-50 MT of woody biomass = Total 450 MT Organic bi
Slide 41: Useful Almond Industry Websites
Useful Almond Industry Websites Industry Associations Californian Almond Board www.almondboard.com Almond Board of Australia www.australianalmonds.com.au International Nut and Dried Fruit Council www.nutfruit.org/about-us/history Industry Reports US Crop Forecasts (Subjective, Objective) www