Select Harvests Limited · ASX:SHV
Select Harvests — Merger or Acquisition (October 2020)
52 slides from Select Harvests's merger presentation, Oct 1, 2020
Slide 1: Acquisition of Piangil Almond Orchard and Capital Raising
For personal use only Acquisition of Piangil Almond Orchard and Capital Raising 1 October 2020 1 NOT FOR DISTRIBUTION OR RELEASE IN THE NOTUNITED STATES FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 2: Important notice and disclaimer
Important notice and disclaimer For personal use only The following notice and disclaimer applies to this investor presentation (Presentation) and you are therefore advised to read this carefully before reading or making any other use of this Presentation or any information contained in this Present
Slide 3: Important notice and disclaimer
Important notice and disclaimer For personal use only SUMMARY INFORMATION This Presentation contains summary information about Select Harvests and its subsidiaries (Group) and their respective activities which is current only as at the date of this Presentation (unless otherwise stated). The informa
Slide 4: Important notice and disclaimer
Important notice and disclaimer For personal use only FORWARD LOOKING STATEMENTS (CONTINUE) You are strongly cautioned not to place undue reliance on forward-looking statements, particularly in light of the current economic climate and the significant volatility, uncertainty and disruption caused by
Slide 5: Important notice and disclaimer
Important notice and disclaimer For personal use only FINANCIAL INFORMATION AND REFERENCES TO SELECT HARVESTS In this Presentation, unless otherwise stated or the context requires otherwise, references to 'dollar amounts', '$', 'AUD' or 'A$' are to Australian dollars. This Presentation includes cert
Slide 6: Contents
Contents For personal use only Important Notice and Disclaimer 2 Piangil Almond Orchard Acquisition 8 Company Update 14 Capital Raising 19 Appendices - Appendix A: Overview of the Implementation Deed Terms 27 - Appendix B: Overview of the Underwriting Agreement Terms 29 - Appendix C: Key Risks 35 -
Slide 7: Select Harvests - in control of our destiny
Select Harvests - in control of our destiny For personal use only 7 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 8: Acquisition overview
Acquisition overview For personal use only • Select Harvests Limited (SHV) has agreed to acquire the Piangil Almond Orchard in north-west Victoria comprising of: o 1,566ha of almond orchards, of which 1,177ha are mature plantings and 389ha are immature; o 1,877ML high reliability water entitlements
Slide 9: Acquisition rationale
Acquisition rationale For personal use only Optimise the • The Acquisition aligns with SHV’s strategy to grow almond base our almond orchard base • Piangil Almond Orchard is a high yielding ‘top quartile’ orchard. SHV’s immediate focus will be to ‘Top quartile’ invest in equipment and infrastructure
Slide 10: Location of Piangil Almond Orchard
Location of Piangil Almond Orchard For personal use only Robinvale Piangil Almond Orchard 1 1 1 Inclusive of Piangil Almond Orchard 2 distance to SHV’s Carina West Processing Facility 10 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 11: Piangil Almond Orchard expected to deliver volume growth of approximately 20% in FY21
The Piangil Almond Orchard is expected to deliver volume growth to SHV of approximately 20% in FY21 For personal use only The almond crop is biennial in nature with expected +/- 10% per annum variation in tonnage SHV Theoretical Harvest Volume 2020-2028 + 34% + 20% 30,503 30,777 30,948 29,718 29,871
Slide 12: Select Harvests - Combined orchard profile with Piangil
Select Harvests - Combined orchard profile with Piangil For personal use only Select Harvests Total Planted Select Harvests Planted Almond Hectares1 Almond orchard portfolio (as at 30 September 2020) hectares acres 9,262 Central Region Company Owned 1,693 4,183 7,677 7,696 Piangil Orchard 1,566 3,87
Slide 13: Select Harvests - Orchard age profile with the Piangil Almond Orchard
Select Harvests - Orchard age profile with the Piangil Almond Orchard For personal use only Age Profile of SHV Almond Orchard Portfolio (inc. Piangil) 95% of current planted hectares are cash generative 31% 63% 6% Planted orchards are Planted orchards in economic sweetspot - Planted orchards post im
Slide 14: Outlook
For personal use only Company Update 14 NOT FOR DISTRIBUTION OR RELEASE IN THE NOTUNITED STATES FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 15: Outlook
Outlook For personal use only SHV 2020 Crop and Price Update • 91% of hulling and shelling of the Select Harvests 2020 crop is completed, with the remainder forecast to be complete by mid- October. • 2020 crop volume has increased to greater than 23,250MT, up on the 2019 crop of 22,690MT. • With sal
Slide 16: Outlook (continued)
Outlook (continued) For personal use only SHV 2021 Outlook • Pollination is complete. We are now at the fruit sizing stage in the horticultural cycle. Tree health and crop outlook is positive. Recent rains have resulted in higher annual water allocations and lower water market pricing. At this early
Slide 17: Combined U.S. and Australian almond exports increased by 7% p.a.
Combined U.S. and Australian almond exports increased by 7%p.a. CAGR between 2006 and 2020 - a very strong long-term trend For personal use only Source: Almond Board of California and Almond Board of Australia. The U.S. and Australia account for around 95% of global almond exports The underlying lon
Slide 18: Almond price history
10 year almond price history For personal use only Since July 2020, almond prices have started to recover and have increased by ~US$ 0.20/lb Source: Derco Foods Lower prices have stimulated demand and seen almonds included in more new products 18 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 19: Capital Raising
For personal use only Capital Raising 19 NOT FOR DISTRIBUTION OR RELEASE IN THE NOTUNITED STATES FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 20: Capital raising to fund Acquisition and maintain balance sheet strength
Capital raising to fund Acquisition and maintain balance sheet strength For personal use only Sources of Funds A$’m • SHV has refinanced its existing core debt facilities and secured additional facilities to Placement 40 fund the Acquisition as follows: Entitlement Offer 80 • $190.0 million, 3 year,
Slide 21: Proforma Balance Sheet
Proforma Balance Sheet For personal use only Balance Sheet Capital Debt Piangil Almond Proforma as at 30-Sep-19 31-Mar-20 In $’m Raising1 Financing2 Acquisition3 31-Mar-204 Cash And Cash Equivalents 11.6 1.3 115.6 39.1 (154.7) 1.3 Trade And Other Receivables 50.2 46.5 46.5 Inventories 111.8 165.5 16
Slide 22: Capital Raising overview
Capital Raising overview For personal use only • A fully underwritten Capital Raising of $120 million which comprises: • a 1 for 6.3 pro-rata accelerated non-renounceable entitlement offer of approximately $80 million, Offer structure comprising an Institutional Entitlement Offer and a Retail Entitl
Slide 23: Capital Raising overview (continued)
Capital Raising overview (continued) For personal use only • The Retail Entitlement Offer will open on Friday, 9 October 2020 and closes on Thursday, 22 October 2020 Retail Entitlement • Eligible retail shareholders who take up their entitlement in full under the Retail Entitlement Offer can also Of
Slide 24: Capital Raising timetable (Indicative)
Capital Raising timetable (Indicative) For personal use only Event Date Trading halt, Institutional Entitlement Offer and Placement opens (aftermarket) Thursday, 01 October 2020 Institutional Entitlement Offer and Placement closes (5:00pm) Friday, 02 October 2020 Announcement of results of Instituti
Slide 25: Summary
Summary For personal use only 1. Piangil Almond Orchard acquisition delivers to our strategic priorities • High yielding “top quartile” orchard • 25% of orchard immature with a weighted average age of 10.9 years • The acquisition is expected to be EPS accretive1 2. The acquisition increases the scal
Slide 26: Appendices
For personal use only Appendices 26 NOT FOR DISTRIBUTION OR RELEASE IN THE NOTUNITED STATES FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 27: Overview of the Implementation Deed terms
For personal use only Overview of the Implementation Deed terms 27 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 28: Overview of the Implementation Deed terms
Overview of the Implementation Deed terms For personal use only • On 1 October 2020, SHV, UAL, BLA and LLA entered into an Implementation Deed and executed Sale Agreements that govern the terms Overview upon which SHV will acquire the Piangil Almond Orchard. • Implementing the transaction is subject
Slide 29: Overview of the Underwriting Agreement terms
For personal use only Overview of the Underwriting Agreement terms 29 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 30: Overview of the Underwriting Agreement terms
Overview of the Underwriting Agreement terms For personal use only The Underwriter is acting as underwriter of the Placement and the Entitlement Offer. Select Harvests has entered into an underwriting agreement with the Underwriter (Agreement) pursuant to which the Underwriter has agreed to fully un
Slide 31: Overview of the Underwriting Agreement terms
Overview of the Underwriting Agreement terms For personal use only • Select Harvests or any Group Member is Insolvent or there is an act or omission which is likely to result in Select Harvests Insolvency or any such Group Member becoming Insolvent. • Select Harvests or any of its subsidiaries (i) p
Slide 32: Overview of the Underwriting Agreement terms
Overview of the Underwriting Agreement terms For personal use only • there is an material adverse effect, or an event occurs which is in the reasonable opinion of the Underwriter is likely to give Adverse change rise to an material adverse effect, in the business, assets, liabilities, financial posi
Slide 33: Overview of the Underwriting Agreement terms
Overview of the Underwriting Agreement terms For personal use only • There is introduced, or there is public announcement of a proposal; to introduce, into the Parliament of the Commonwealth of Australia or any State or Territory of Australia a law or prospective law or any new regulation is made un
Slide 34: Overview of the Underwriting Agreement terms
Overview of the Underwriting Agreement terms For personal use only • Select Harvests fails to comply with a provision of its Constitution, the ASX Listing Rules, the Corporations Act, applicable laws, or a requirement or order, made by or on behalf of ASIC, ASX or any Governmental Agency, which is n
Slide 35: Key Risks
For personal use only Key Risks 35 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 36: Risks
Risks For personal use only This section discusses some of the risks associated with an investment in shares in Select Harvests. These risks may affect the future operating and financial performance of Select Harvests and the value of Select Harvests’ shares. The risks set out below are not listed i
Slide 37: Acquisition Specific risks
Acquisition Specific risks For personal use only Transaction risk ▪ Select Harvests and its advisors have undertaken financial, operational, legal, tax and other analyses in respect of the Acquisition in order to determine its attractiveness to Select Harvests and whether to pursue the Acquisition.
Slide 38: Acquisition Specific risks (continued)
Acquisition Specific risks (continued) For personal use only Completion risk ▪ Completion of the Acquisition is conditional on various conditions including ACCC approval not being withdrawn, revoked or amended, the approval of UAL Scheme Members and of the Court as well as the absence of any Materia
Slide 39: Capital Raising Risks
Capital Raising Risks For personal use only Equity underwriting risk ▪ Select Harvests has entered into an underwriting agreement under which Bell Potter Securities Ltd (Underwriter) has agreed to fully underwrite the Capital Raising, subject to the terms and conditions of the underwriting agreement
Slide 40: Select Harvests Limited Specific risks
Select Harvests Limited Specific risks For personal use only COVID-19 risk ▪ Due to the COVID-19 global pandemic, Select Harvests has been designated a ‘permitted business', with no restrictions and under a COVID-19 Safe Plan. It has been able to continue operating throughout the pandemic period and
Slide 41: Select Harvests Limited Specific risks (continued)
Select Harvests Limited Specific risks (continued) For personal use only Weather patterns, climatic conditions and climate change risks ▪ Select Harvests is exposed to Australian weather patterns, disease and insect infestations and natural disasters, for example drought, extreme heat, floods, hail,
Slide 42: Select Harvests Limited Specific risks (continued)
Select Harvests Limited Specific risks (continued) For personal use only Key suppliers risk ▪ In addition to water, crop size and quality is heavily reliant on a number of key suppliers including access to a sustainable annual supply of bees for tree pollination and the loss of any one or more of it
Slide 43: Select Harvests Limited Specific risks (continued)
Select Harvests Limited Specific risks (continued) For personal use only Competition risk ▪ Select Harvests' financial performance or operating margins and the value of Select Harvests could be materially adversely affected if existing competitors increase market share or new competitors enter the m
Slide 44: Select Harvests Limited Specific risks (continued)
Select Harvests Limited Specific risks (continued) For personal use only Health and safety risk ▪ Safety risks are inherent in Select Harvests’ business activities including harvesting, manual handling and equipment handling. A health and safety incident may lead to a serious injury or death, which
Slide 45: General risks
General risks For personal use only Share price and volume fluctuations ▪ Securities may experience extreme price and trading volume fluctuations. Following the Capital Raising, there may not be an active trading market in Select Harvests’ shares. If a market is not sustained, it may be difficult fo
Slide 46: General risks (continued)
General risks (continued) For personal use only Changes in accounting policy ▪ Select Harvests is subject to the usual business risk that there may be changes in accounting policies which impact on Select Harvests. Asset impairment risk ▪ The Select Harvests’ Board regularly monitors impairment risk
Slide 47: Foreign selling restrictions
For personal use only Foreign selling restrictions 47 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 48: Foreign selling restrictions
Foreign selling restrictions For personal use only This document does not constitute an offer of new ordinary shares (New Shares) of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares may not be offered
Slide 49: Foreign selling restrictions (continued)
Foreign selling restrictions (continued) For personal use only Hong Kong WARNING: The contents of this document have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the offer. If you are in doubt about any contents of this document, you
Slide 50: Foreign selling restrictions (continued)
Foreign selling restrictions (continued) For personal use only Member States of the European Economic Area (“EEA”) (Norway, Belgium and Luxembourg) In relation to each Member State of the European Economic Area and the United Kingdom (each a “Relevant State”), no New Shares have been offered or will
Slide 51: Foreign selling restrictions (continued)
Foreign selling restrictions (continued) For personal use only New Zealand This document has not been registered, filed with or approved by any New Zealand regulatory authority under the Financial Markets Conduct Act 2013 (the “FMC Act”). The New Shares are not being offered to the public within New
Slide 52: Thank you
Thank you For personal use only 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 fou
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