Select Harvests Limited · ASX:SHV
Select Harvests — Shareholder Meeting (February 2020)
42 slides from Select Harvests's shareholder meeting presentation, Feb 21, 2020
Slide 1: Select Harvests Limited (ASX:SHV) 2019 Annual General Meeting – Sustainable Growth
Select Harvests Limited (ASX:SHV) 2019 Annual General Meeting – Sustainable Growth 21 February 2020
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: Michael Iwaniw – Chairman
Michael lwaniw — Chairman Zz i SELECY HAIESTS D sitet .O,, Cee SQ >
Slide 4: Agenda
Agenda Chairman’s Address Performance Overview Strategy Update Global Market Update Managing Director’s Address Divisional Performance Key Achievements Future Initiatives 2020 Crop Update AGM Resolutions 4
Slide 5: Select Harvests Board
Select Harvests Board Michael Iwaniw, Chairman, Appointed Chairman November 2011 Michael Carroll, Non-Executive Director, Appointed March 2009 Fred Grimwade, Non-Executive Director, Appointed July 2010 Nicki Anderson, Non-Executive Director, Appointed January 2016 Fiona Bennett, Non-Execut
Slide 6: FY2019 Financial Overview
FY2019 Financial Overview NPAT EBITDA1 EPS 55.5 cps $53.0m $95.2m ↑ 139.7% ↑ $32.6m ↑ $43.5 m - Final dividend of 20 cps fully franked Net Debt/Equity Annualized ROCE 0perating Cashflow 6.6% - $27.4m Finance Leases 16.5% $80.3m - $0 Bank Debt - Net $7.9m Cash on Hand ↑ 9.2 ppts ↑ $62.0m 1 - Non-IFRS
Slide 7: FY2019 Almond Division Overview
FY2019 Almond Division Overview Almond EBIT Almond Volume Almond Price 22,690 MT $8.60/kg $82.2m ↑ 44.5% ↑ $46.8m - Good Conditions ↑ 6.8% - AUD/USD hedged below 71c - Volume, price and production - Improved Horticultural - Strong demand globally cost per Kg programs - Higher in-shell mix - Frost re
Slide 8: FY2019 Food Division Overview
FY2019 Food Division Overview Food Division EBIT Industrial Sales Consumer Sales - Lucky branded cooking nuts - China market has continued to $5.0m expand for value-add products market share under pressure following the introduction of ex Parboil & Thomastown FLAT - Plant based ingredients growth Co
Slide 9: Select Harvests – in control of our destiny
Select Harvests – in control of our destiny Vision To be a Leader in the Supply of Better for You Plant Based Foods Trust & Respect Integrity & Diversity Sustainability Performance Innovation Values Treat all stakeholders with trust and respect All decisions and transactions will not compromise the
Slide 10: Food Division
Food Division Our strategy is to add value to meet the increasing demand for plant based foods both within Australia and Asia 10
Slide 11: Water
Water We are proud to be growing a healthy food - almonds 11
Slide 12: FY2019 – Safety, Sustainability and People
FY2019 – Safety, Sustainability and People Safety Sustainability People - Continued focus on reduced - Company’s top priority – all water use - Completed first externally levels - H2E biomass plant – waste to assessed culture survey - Delivering Zero Harm Safety energy – orchard compost - Leadership
Slide 13: Almond Market Update
Almond Market Update US Market Update (January 2020 Position Report): - US crop just entering bloom - Industry forecasting 2019 crop of 2.5 billion to 2.6 billion pounds - Jan YTD Receipts 2.5 billion vs 2.25 billion pounds LY up 11.45% - Shipments 1.27 billion vs 1.22 billion pounds LY up 4.5% - Co
Slide 14: Conclusion
Conclusion SHV can continue to deliver sustained growth in earnings 14
Slide 15: Paul Thompson – Managing Director
Paul Thompson – Managing Director 15
Slide 16: Movement in SHV Group EBIT ($M)
Movement in SHV Group EBIT ($M) Minimised through acquisition and ownership strategy Investment in new technology and a clean crop Productivity improvement through targeting higher Re-grading of prior yields year crops – now all Plant based food macro and processed increased China demand 34.9 Improv
Slide 17: Balance Sheet
Balance Sheet Year Ending Balance Sheet Solid Balance Sheet In Place $ millions FY 2018* FY 2019 Increased current assets – working capital of $129.7m is higher Current Assets excl. Cash 152.0 162.1 due to value of 2020 growing crop (inventory) – as immature Cash 6.9 11.6 trees develop Non-Current
Slide 18: AASB 16 – Leases – Impact from 1 October 2019
AASB 16 – Leases – Impact from 1 October 2019 Initial impact on adoption as follows: Balance sheet $'000 30 September AASB 16 1 October 2019 Transition 2019 Financial Impact Total Current Assets 173,666 173,666 Total Non Current Assets 379,190 379,190 Major leases relate to long term orchard lease
Slide 19: Almond Division
Almond Division 19
Slide 20: The ownership of water has changed
The ownership of water has changed ■ The share of permanent entitlements owned by non-water users and the environment has increased significantly Changing ownership of high-reliability water shares in northern Victoria Source: Victorian Water Register 20
Slide 21: What Select Harvests is doing to manage water
What Select Harvests is doing to manage water ■ SHV policy is to have a portfolio of water sources to minimize exposure to seasonal pricing including: ■ Entitlement ownership ■ Long and short term lease ■ Forward contract ■ Spot purchases of annual allocations ■ Executive dedicated to water purchasi
Slide 22: Murray-Darling Basin water market inquiry
Murray-Darling Basin water market inquiry ■ SHV has made a submission to the ACCC’s Murray-Darling Basin water markets inquiry ̶ SHV supports the Murray-Darling Basin (MDB) system. Clearly defined water property rights and tradable markets supported by robust price mechanisms have significantly impr
Slide 23: Future Almond Volume Growth
Future Almond Volume Growth Select Harvests is now consistently yielding over 1.35 tonnes per acre – this adds considerable value in future years ̶ The almond crop is biannual in nature with +/- 10% per annum variation in tonnage possible Our investment in almond orchards ensures underlying organic
Slide 24: 2019 Yield Performance
2019 Yield Performance Target Yield 2018 2019 Outperformance vs. Industry Standard across all mature and immature age cohorts 24
Slide 25: Almond Division Outlook
Almond Division Outlook Crop Update Sales Horticulture - Global almond macro is still - Increased investment in risk strong - Good pollination and growing mitigation - 2019 US crop larger than initial conditions to date - Increased expenditure on forecast and 2020 bloom - Immature orchard profile an
Slide 26: Food Division and Corporate
Food Division and Corporate 26
Slide 27: Project Shaker
‘Project Shaker’ Project Shaker’s aim is to significantly improve the operational efficiency and profitability of the Food Division ■ Sales & Marketing ̶ Re-launch Lucky brand, including packaging upgrades, advertising and new product innovation ̶ Develop the Sunsol brand - use data and consumer ins
Slide 28: FY2020 Food Division & Corporate Outlook
FY2020 Food Division & Corporate Outlook Industrial Sales Lucky Sunsol - Continued strong demand in - New packaging and marketing - Further New Product Export Market program to re-engage Development opportunities - China market disrupted consumers centered around Probiotics - Increased demand for pa
Slide 29: FY2020 Top 10 Priorities
FY2020 Top 10 Priorities 1. 2020 Crop Harvest Program – Ensure optimal tree health and production 2. Implement New Technology – Capital investment in new sorting technology (improved quality) 3. Cost Reductions - Continue to reduce cost per kg across all production stages 4. Mitigate Water Cost - Wi
Slide 30: Annual General Meeting
Annual General Meeting 21 February 2020 Consideration of The Financial Statements & Reports 30
Slide 31: Discussion
Discussion Z SELECT HARVESTS GD Sunsot eee -sdland ain G2
Slide 32: Resolution #1: Remuneration Report
Resolution #1: Remuneration Report 32
Slide 33: Resolution #1: Remuneration Report
Resolution #1: Remuneration Report For: 46,329,880 Against: 389,806 Open-Usable: 639,231 33
Slide 34: Resolution #2(a): Election of Fiona Bennett
Resolution #2(a): Election of Fiona Bennett 34
Slide 35: Resolution #2(a): Election of Fiona Bennett
Resolution #2(a): Election of Fiona Bennett For: 46,238,075 Against: 492,081 Open-Usable: 651,725 35
Slide 36: Resolution #2(b): Election of Guy Kingwill
Resolution #2(b): Election of Guy Kingwill 36
Slide 37: Resolution #2(b): Election of Guy Kingwill
Resolution #2(b): Election of Guy Kingwill For: 46,646,734 Against: 48,275 Open-Usable: 666,409 37
Slide 38: Resolution #3: Approve increase in maximum annual remuneration of non-executive directors
Resolution #3: Approve increase in maximum annual remuneration of non-executive directors 38
Slide 39: Resolution #3: Approve increase in maximum annual remuneration of non-executive directors
Resolution #3: Approve increase in maximum annual remuneration of non-executive directors For: 46,003,886 Against: 729,024 Open-Usable: 634,947 39
Slide 40: Resolution #4: Remuneration Arrangements for the Managing Director
Resolution #4: Remuneration Arrangements for the Managing Director – Participation by the Managing Director in the Long Term Incentive Plan 40
Slide 41: Resolution #4: Remuneration Arrangements for the Managing Director
Resolution #4: Remuneration Arrangements for the Managing Director – Participation by the Managing Director in the Long Term Incentive Plan For: 46,189,400 Against: 579,749 Open-Usable: 635,947 41
Slide 42: 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
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