Select Harvests Limited · ASX:SHV
Select Harvests — 1H FY2024 Earnings Presentation
24 slides from Select Harvests's earnings presentation, May 31, 2024
Slide 1: FY2024 Half Year Results Presentation
FY2024 Half Year Results Presentation 31 May 2024 David Surveyor – Managing Director and CEO Brad Crump – CFO and Company Secretary 1
Slide 2: Webcast
WEBCAST This presentation deck accompanies a live webcast at 10:30am AEST on Friday 31st May 2024 You can participate in the webcast by using the following link https://us02web.zoom.us/webinar/register/WN_nkRhSJOATTmPnnLKbEqJ5g You are advised to log on at least 15 minutes before 10:30am. If you are
Slide 3: Disclaimer and Basis of Preparation
DISCLAIMER AND 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
Slide 4: Agenda
AGENDA 1. Mid Year Performance 2. Financial Results 3. Strategy and Transformation 4. Business Outlook • Picture from SHV required 5. Questions 4
Slide 5: Mid Year Performance
MID YEAR David Surveyor - Managing Director and CEO PERFORMANCE 5
Slide 6: Safety – Strong and Continual Improvement
Safety – Strong and Continual Improvement Total Recordable Injury Frequency Rate1 Key Areas of improvement: Injuries per million hours worked • “Felt Leadership” and increased safety visibility underway 30.1 MTIFR 28.6 LTIFR • Building safety processes: – Incident investigation training for supervis
Slide 7: 1H FY2024 Financial Results
1H FY2024 Financial Results • 2024 crop – 29,000MT @ $7.52/kg ($7.42/kg + $0.10/kg freight benefit) NPAT • 2023 crop inventory quality write-off ($2.1m) ($2.1m) • 2H FY2024 will see financial benefit of 3rd party processing and hull sales • 1H FY2024 Net Debt $237.9m • Debt levels increased as forec
Slide 8: Key Results Drivers – Volume
Key Results Drivers – Volume Strong 2024 crop volume Almond Volume (MT) 2024 Crop • We have commenced execution of our horticulture strategy targeting improved yield • Increasing the Forecast crop to 29,500 – 30,000MT • Above forecast yields achieved in South Australia • Yields in Victoria in line w
Slide 9: Key Results Drivers – Almond Price
Key Results Drivers – Almond Price SHV almond price increased by 17% in 1H FY2024 Almond Market Price 1 8.00 USD/kg Nonpareil Kernel Global pricing increases supported by Manufacturing 7.50 Carmel Kernel better SHV crop and sales approach 7.00 Nonpareil Inshell 6.50 • 10 May 2024 USDA crop forecast
Slide 10: Key Drivers – Production Cost
Key Drivers – Production Cost Total Almond Production Cost1 $A/kg Cost Reduction • Cost of production reduced to $6.85/kg despite $9.2m of inflationary costs and $5.2m increase in lease costs • Water costs decreased – usage was higher (drier year) offset by lower pricing • Electricity costs higher d
Slide 11: Financial Results
FINANCIAL Brad Crump – CFO and Company Secretary RESULTS 11
Slide 12: Income Statement
Income Statement Improvement in profitability due to return to normal operating profile and profit recognition $ millions 1H FY2023 Factors Contributed To Improved Earnings: (except where indicated) 1H FY2024 Restated* Variance % Change Almond volume (Mt) 29,000 17,500 11,500 65.7% • 1H FY2024 EBITD
Slide 13: Balance Sheet
Balance Sheet SHV balance sheet has remained in line with first half expectations $ millions 1H FY2023 Key Features of the Balance Sheet (except where indicated) 1H FY2024 Restated Current assets ex. cash 308.7 211.1 • Inventory/biological asset levels higher than 1H FY2023, due to an increased 2024
Slide 14: Bank Facilities – Debt and Cash
Bank Facilities – Debt and Cash Net debt increased as forecast but sufficient coverage from debt facilities remains Drivers of Higher Net Debt: • Lower volume of almonds available to 267.0 sell due to reduced 2023 crop • Reduction in price impacting 2023 237.9 crop value Partially offset by progress
Slide 15: Net Debt vs Facility limit
Net Debt vs Facility limit Debt levels are forecast to reduce in 2H FY2024 as the 2024 crop sales program is delivered Net Bank Debt Forecast Forecast debt profile based on 1H 300 70% FY2024 Fair Value assumptions: • Is forecast to reduce to a seasonal low point 250 60% in September 2024 • FY2025 op
Slide 16: Cash Flows
Cash Flows Lower 2023 crop sales and pricing impacted 1H FY2024 cashflows $ millions (except where indicated) 1H FY2024 1H FY2023 Main Cash Movements Customer receipts 87.0 82.7 Supplier & employee payments (103.1) (100.7) • Negative operating cash flows for the half year driven by: Tax refund/ (pai
Slide 17: Strategy & Transformation
STRATEGY & David Surveyor - Managing Director and CEO TRANSFORMATION 17
Slide 18: Strategic Priorities - Disciplined Execution
Strategic Priorities - Disciplined Execution Strategy is focused on delivering increased Shareholder returns through improved performance and growth Strategic Pillars Substantially greater Leadership in processing Maximise returns from Innovate to drive almond volume scale and efficiency almond crop
Slide 19: Processing Improvement - On track
Processing Improvement - On track Average volumes processed per day are currently 30% higher than prior year YTD Daily Tonnes Per Hour Processed Key operational improvement target 16 YTD Average Achieved = 10.81t/ph generating improved returns: 14 • Processing facility will handle a record volume in
Slide 20: PMO – Strategy Execution and Discipline
PMO – Strategy Execution and Discipline Execution momentum building with growing profit impact and cash benefit Execution Profit Impact The P&L Impact Count of initiatives Millions AUD 20 Millions AUD FY23 FY24 H1 FY24+ 9 11 3.9 5 5.0 52 12 1.8 10 40 FY23 1H FY24 Total (6) 9.6 Cash Benefit 2 22 22 M
Slide 21: Outlook
SELECT HARVESTS. © . OUTLOOK’
Slide 22: Outlook – Continued Improvement
Outlook – Continued Improvement Full benefit of FY2024 initiatives to flow through. • Orchards back to historic yielding levels • Yield improvement targeted through strategic input application SHV Crop • Input costs remain favourable (water, fertiliser and chemicals) • Forecast weather patterns rema
Slide 23: Key Messages
Key Messages Transformation, disciplined management and positioned for the upturn • 2024 Forecast increases to 29,500 – 30,000t. Substantial increase in Crop size and Quality (NSW remains an opportunity) • Total production costs per kilogram reducing Operational Gains • Increased processing capacity
Slide 24: Questions
QUESTIONS 24