Slide 1: Scales Corporation Limited Half Year Results
Scales Corporation Limited Growing your Diversified Agribusiness Half Year Results For the Six Months Ended 30 June 2021 25 August 2021
Slide 2: Agenda
Agenda 1. 1H21 Overview 2. COVID-19 and Sustainability Updates 3. Group Results 4. Divisional Performance 5. FY21 Outlook Appendices: I. NZ IFRS Reconciliation II. Disclaimer Scales Corporation Limited – 2021 Half Year Results 2
Slide 3: 1H21 Overview
1H21 Overview 1
Slide 4: 1H21 Overview
1H21 Overview • Exceptional performance during a period with significant challenges: ▪ Scales Logistics procured containers, enabling our businesses to successfully export their finished product ▪ Extraordinary effort to pick and pack the harvest despite uncertainties surrounding labour availability
Slide 5: COVID-19 and Sustainability Updates
COVID-19 and Sustainability Updates 2
Slide 6: COVID-19 Update
COVID-19 Update Our people remain our first priority • Scales notes the following with regards to the current domestic lockdown: ▪ Scales’ businesses continue to occupy the privileged position of being ‘essential’ ▪ Scales had previously updated its pandemic preparedness policies, and was able to sm
Slide 7: A Sustainable Environment
A Sustainable Environment Together we can do so much Environment • Carbon sequestration project with AUT nearing completion, with pleasing results for existing and long-term apple plantings • Continued focus on reducing carbon footprint (e.g. fuel use and waste to landfill) • Collaborated with local
Slide 8: Group Results
Group Results 3
Slide 9: Group Financial Performance
Group Financial Performance Diversified strategy and outstanding team performance contributes to strong interim results • Underlying NPAT of $33.3m (up 15.4% on 1H20) • Underlying EBITDA of $54.8m (up 11.0% on 1H20): Income Statement NPAT EBITDA $m 1H21 1H20 % chg. 1H21 1H20 % chg. Underlying (exclu
Slide 10: Divisional Overview
Divisional Overview Excellent Results in Horticulture and Food Ingredients divisions • Horticulture – strong in-market prices on lower export volumes, assisted by diversified markets and varieties • Food Ingredients – benefitted from increased demand and changes in product mix and margin • Logistics
Slide 11: Balance Sheet
Balance Sheet Balance Sheet $m Jun-21 Jun-20 Current assets excluding cash Trade & other receivables 77.0 86.6 Inventories 32.7 26.4 Agricultural produce 74.4 75.8 Other 11.5 9.5 • Net Cash of $38.0m at 30 June 2021 vs $54.8m at 30 June 2020 reflecting: Current Assets 195.7 198.3 ▪ Investment in new
Slide 12: Divisional Performance
Divisional Performance 4
Slide 13: Horticulture – Performance and Labour
Horticulture – Performance and Labour Strong performance despite shortage of labour • Underlying EBITDA $38.0m (1H20: $36.9m): ▪ Higher pricing partially offset by lower volumes and increased labour and shipping costs • Impacted by shortage of skilled RSE workforce: ▪ ~14% less RSE workers over the
Slide 14: Horticulture – Automation
Horticulture – Automation Improving efficiency and returns through automation • Mr Apple is part-way through a 10-year investment and automation plan to increase productivity across the business • Our initial focus is on our post-harvest activities. The first step of this journey was the development
Slide 15: Horticulture – Volumes
Horticulture – Volumes 2021 volumes impacted by inclement weather • Forecast Mr Apple total own grown export volumes of 3.6m TCEs (2020: 3.9m TCEs): ▪ Exceptional effort made by a smaller Mr Apple team to pick all fruit ▪ Export packout to date approximately 73% (2020: 76%). Our technology is able t
Slide 16: Horticulture – Markets and Pricing
Horticulture – Markets and Pricing Geographical and channel diversification continuing to provide benefits • UK market stable, Europe impacted by lower available volumes of Traditional varieties: ▪ Pricing above or in line with prior year ▪ As a result of a lower anticipated European crop, the sales
Slide 17: Horticulture - Branding and Market Strategies
Horticulture - Branding and Market Strategies Maximising appeal throughout the value chain, to consumers as well as wholesalers and retailers • The ongoing focus on investing in the Mr Apple brand continues to pay dividends, Sales by Channel – China - 2020 particularly as our business increases the
Slide 18: Mr Apple – Social Media Examples
Mr Apple – Social Media Examples Using social media to actively build our brands with consumers throughout Asia • Mr Apple has presence on Facebook across SE Asia, and in China is on WeChat, Weibo, Douyin (tiktok) and Little Red Book • Facebook and Instagram campaigns held May to September in Vietna
Slide 19: Food Ingredients - Performance
Food Ingredients - Performance Strong performance reflecting sustained pet food demand • Excellent first half results, Underlying EBITDA of $16.1m (1H20: $11.0m): ▪ 30% increase in volumes sold compared to 1H20 ▪ Movement in profitability reflects changes in product mix and margin ▪ Year-on-year com
Slide 20: Logistics - Performance
Logistics - Performance Strategic value far exceeds financial contribution • Scales Logistics successfully navigated a domestic shortage of refrigerated containers (reefers) to ensure all of its horticulture customers were able to ship their 2021 harvest. Scales Logistics’ perishable expertise and s
Slide 21: FY21 Outlook
FY21 Outlook 5
Slide 22: Full Year Outlook for 2021
Full Year Outlook for 2021 Due to a strong 1H21 result Scales has upgraded its FY21 guidance • Full year Underlying Net Profit* now expected to be between $32.0m and $37.0m. This is inclusive of the effect of NZ IFRS 16 Leases of approximately $0.5m ▪ Implies an Underlying EBITDA range of between $6
Slide 23: Appendices
Appendices
Slide 24: Appendix I – NZ IFRS Reconciliation
Appendix I – NZ IFRS Reconciliation Reconciliation of Divisional Underlying Profitability to Reported Profitability Group Horticulture Food Ingredients Logistics Corporate & Eliminations $m 1H21 1H20 1H21 1H20 1H21 1H20 1H21 1H20 1H21 1H20 Underlying / Reported Revenue 253.8 253.3 127.4 136.3 99.8 8
Slide 25: Appendix II - Disclaimer
Appendix II - Disclaimer 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 per