Slide 1: Select Harvests 2011 Full Year Results
For personal use only Select Harvests 2011 Full Year Results 29th August 2011
Slide 2: Agenda
Agenda For personal use only Overview Financial & Operating Performance Strategy Strong Industry Fundamentals Outlook 2
Slide 3: Overview
Overview For personal use only NPAT of $17.7 million (FY10: $17.3 million). Includes EBIT impact of discount on acquisition of almond orchards of $5.6 million (net of transaction costs) and $1 million one off costs in the Food Division. EPS 33.7 cents per share (FY10: 43.3 cents per share) Fin
Slide 4: Industry pressures
Industry pressures For personal use only Increased cost of Lower yields and Higher AUD and lower production wet harvest almond price • Drought conditions - • Crop below “standard • AUD at 30 year highs now eased industry yields” • Quality impact on sales mix • Higher fertiliser & power • Crop qualit
Slide 5: Agenda
Agenda For personal use only Overview Financial & Operating Performance Strategy Strong Industry Fundamentals Outlook 5
Slide 6: Income statement
Income statement ($m) Year ended 30/06/11 Year ended 30/06/10 For personal use only Sales revenue 248.3 238.4 EBIT Managed Orchards 14.1 17.7 Company Orchards 1 8.1 6.8 Almond Division 22.2 24.5 Food Division 2 3.7 5.1 Corporate (3.3) (3.6) EBIT 22.6 26.0 Interest Expense (3.4) (2.4) Net Profit Befo
Slide 7: Operating EBIT
Operating EBIT For personal use only OPERATING EBIT ORCHARD DEVELOPMENT 2010: $29.6m (1 & 2) • Nursery 2011: $25.9m • Orchard Establishment COMPANY ORCHARDS EBIT ORCHARD MANAGEMENT EBIT 2010: $6.8m 2010: $11.2m ORCHARD MANAGEMENT 2011: $8.1m (1) 2011: $10.3m • Almond growing 2010 CROP: 2,800mt ACRES
Slide 8: Balance sheet
Balance sheet As at As at For personal use only ($m) 30/06/11 30/06/10 Current Assets excl. Cash 80.6 70.8 $45m capital raising Cash 7.4 13.2 $115m new debt facility agreed Non Current Assets 214.3 145.7 June 2011, comprises: $50m term debt Total Assets 302.3 229.7 annual working capital fac
Slide 9: Cash flow
Cash flow For personal use only ($m) Year ended Year ended Source of funds: 30/06/11 30/06/10 Equity raising $45m EBITDA (excluding discount on acquisition) 22.8 31.0 Increase in debt $24m Change in Working Capital (20.7) 4.2 Use of Funds: Taxes (Paid)/Received 1.8 (6.5) Acquisitions $25m
Slide 10: Industry pressures - rainfall
For personal use only 100 200 300 400 500 600 700 800 900 1000 0 Rainfall (mm) 1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 Industry pressures - rainfall 1977 1978 Year 1979 1980 1981 1982 1983 1984 1
Slide 11: Industry pressures - yields
Industry pressures - yields For personal use only 2010: SHV 16% 2011: SHV 30% Standard Industry Yields – standard yield per acre applied by Almond Board of Australia to project annual industry crops 11
Slide 12: Almond Division – Managed Orchards
Almond Division – Managed Orchards For personal use only EBIT $14.1m (FY10: $17.7m) FY11 crop est. 18,400mt vs FY10 18,600mt Yields below standard industry yields Olam base fee structure 12 months v 6 Months in 2010 No incentive payments achieved Higher processing costs due to wet harvest
Slide 13: Almond Division – Company Orchards
Almond Division – Company Orchards For personal use only EBIT $8.1m (FY10: $6.8m) includes $5.6m discount on acquisition, net of transaction fees FY11 crop est. 4,175mt (FY10: 2,800mt) while below initial estimates reflects increased acreage and maturity profile FY11 estimated almond price is
Slide 14: Food Division
Food Division EBIT $3.7m (FY10: $5.1m) For personal use only Performance impacted by precautionary recall of almonds in Australia in April 2011. Lost sales and one off recall costs of $ 1m. Sales volumes now rebuilding. Excluding impact of one off costs value-added EBIT increased 9% to $3.5m d
Slide 15: Agenda
Agenda For personal use only Overview Financial & Operating Performance Strategy Strong Industry Fundamentals Outlook 15
Slide 16: Strategy
Strategy Select Harvests’ strategy is to increase orchards under management, broadening For personal use only our access to the full almond value chain: Expand Company Orchards through acquisition, long-lease or by establishing new orchards Leverage our world-leading management capabilities, a
Slide 17: Strategy progression
Strategy progression For personal use only 2008/09 2009/10 2010/11 Managed Orchards model Strategy evolved to address Select Harvests today: reflecting market conditions: structural shift: - significantly increased - suited MIS structure - stabilise business proportion of Company - Timbercorp larges
Slide 18: Company Orchard Profile 2009
Company Orchard Profile 2009 For personal use only FY09: Total orchards under management: 38,300 acres Orchards concentrated in Sunraysia region Northern Victoria Company Orchards <10% portfolio, 10% FY09 EBIT New processing facility with 40,000 tonnes capacity Sunraysia Region, VIC: Managed
Slide 19: Company Orchard Profile 2011
Company Orchard Profile 2011 Wheatbelt Region, Riverina Region, For personal use only FY11 total orchards under WA: NSW: management: 47,080 acres Company Orchards: Company Orchards: Managed Orchards: 33,980 acres 2,000 acres – Stage 1 4,500 acres 2,300 acres – Stage 2 Company Orchards: 13,100 acres
Slide 20: Olam Contract
Olam Contract For personal use only In May 2011 we announced that Olam would not extend orchard management contract beyond the 2012 crop: Agreement covers 29,500 acres of almond orchards in Northern Victoria, formerly owned by Timbercorp and managed by Select Harvests Managed on a three year con
Slide 21: Select Harvests projected crop profile
Select Harvests projected crop profile For personal use only Projections based on standard industry yields 50,000 40,000 30,000 Tonnes 20,000 10,000 0 Standard Industry Yields – standard yield per acre applied by Almond Board of Australia to project annual industry crops 21
Slide 22: Future revenue drivers
Future revenue drivers Volume growth from existing orchards under For personal use only management as they reach full maturity: 17,600 acres under management excluding Olam Potential to yield 23,000 tonnes at full maturity Expansion of Company Orchards: Continue to seek opportunities to ac
Slide 23: Agenda
Agenda For personal use only Overview Financial & Operating Performance Strategy Strong Industry Fundamentals Outlook 23
Slide 24: Global supply-demand dynamic attractive
Global supply-demand dynamic attractive Global market worth an estimated US$4.5 billion For personal use only Supply and demand have grown at 8% CAGR over past decade Current demand growth trending above average growth rate; average supply growth cannot be maintained due to slow-down in recent
Slide 25: Australian Supply
Australian Supply Australia is set to become the world’s no.2 global almond producer by 2015 For personal use only Australia’s product quality and counter seasonal timing allows access to premium market segments Future production increases will occur as young plantings reach maturity, bringing p
Slide 26: Yield and maturity profile
Yield and maturity profile Over the medium term global almond production will plateau as both US and Australia have For personal use only scaled back planting Given the long lead time in generating new production, new plantings will only have a marginal impact in the next few years Global Almond
Slide 27: Supply and demand outlook positive
Supply and demand outlook positive Positive pricing pressure is expected as continued growth in demand for almonds For personal use only exceeds plateauing supply Annual world plantings unlikely to match consumption growth Future almond supply constrained by limited access to suitable producti
Slide 28: Almonds vs other nut categories
Almonds vs other nut categories Almonds are currently trading below other edible nut categories which have tighter supply For personal use only scenarios 28
Slide 29: US Almond Shipments by Destination
US Almond Shipments by Destination For personal use only 600 500 400 Million lbs 300 200 100 0 Americas Western Europe Asia Pacific Middle East/Africa Eastern Europe 2005 2009 2010 Source: Almond Board of California, 2011 29
Slide 30: Long-term almond price dynamics
Long-term almond price dynamics For personal use only 30
Slide 31: Agenda
Agenda For personal use only Overview Financial & Operating Performance Strategy Strong Industry Fundamentals Outlook 31
Slide 32: Outlook: FY12
Outlook: FY12 For personal use only FY12 performance is expected to be better than FY11 based on “standard” growing and harvesting conditions, with expected benefits from: Good crop potential across Company and Managed Orchards Expanded acreage and improved maturity profile of Company orchards
Slide 33: Outlook: Well Positioned
Outlook: Well Positioned For personal use only Select Harvests is the leading almond manager in Australia: Established industry expertise – a driver of growth in Australian almond industry for over 30 years Strong and diversified orchard portfolio with attractive maturity profile matched with fu
Slide 34: Outlook: Future Opportunities
Outlook: Future Opportunities For personal use only Attract additional almond investment based on strong global supply- demand dynamics: Expand orchards in WA Acquire orchards in Murray Darling Basin Increase throughput, utilising processing and marketing capabilities 34
Slide 35: Questions
For personal use only Questions 35