Select Harvests Limited · ASX:SHV

Select Harvests — Corporate Update (April 2014)

46 slides from Select Harvests's corporate update, Apr 9, 2014

1. Slide 1: 2014 Management Briefing & Site Tour Presentation

   For personal use only Select Harvests Limited (“SHV”) 2014 Management Briefing & Site Tour Presentation 10 April 2014

2. Slide 2: Disclaimer & Basis of Preparation

   Disclaimer & Basis of Preparation For personal use only 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 ta

3. Slide 3: Introduction & Overview

   For personal use only Introduction & Overview Paul Thompson Managing Director 3

4. Slide 4: Agenda

   Agenda For personal use only 7.00am Introduction to Select Harvests & Business Overview - Paul Thompson (Managing Director) – 20 mins 7.30am Orchards - Peter Ross (General Manager Horticulture) – 20 mins 8.00am Bus trip to Boundary Bend orchard – 70 mins 9.10am Orchard Tour (Boundary Bend, Carina, W

5. Slide 5: Ambitions for the Day

   Ambitions for the Day For personal use only  Relationships - meet the Team  Tour - see and understand the quality of the business  Achievements - listen to what we have been doing since SHV’s 2013 Management Briefing & Site Tour  Activities - learn what we are doing now and will do going forward

6. Slide 6: SHV – What we have done since last year

   SHV – What we have done since last year For personal use only  Almond Division  Acquired 680 acres of fully mature almond orchards and another 680 acres suitable for growing almonds  Increased processing utilisation – signed 5 year processing contract with 3rd party grower for 4,000 tonne p.a. 

7. Slide 7: SHV – Current Focus

   SHV – Current Focus For personal use only  Almond Division  Continue to search for additional orchards and suitable acreage for future development  Elevate the productivity of orchards to Top Quartile  Improve throughput without compromising product quality  Managing wetter harvest conditions 

8. Slide 8: SHV – Business Update/Outlook

   SHV – Business Update/Outlook For personal use only  Almond Division  Remain confident in fundamentals of industry  Continue to increase our exposure to the almond industry  Internal opportunities remain around energy sourcing and supply chain rationalisation  Developing mechanism to facilitate

9. Slide 9: Orchards

   For personal use only Orchards Peter Ross GM Horticulture Orchards Across three distinct geographic regions with the majority in the economic “sweet spot” 9

10. Slide 10: Orchards – What we have done since last year

    Orchards – What we have done since last year For personal use only  Almond Division  Purchased & integrated Allinga orchard in Loxton SA  Signed off on three year term supply agreements for bees and harvest freight  Removed old trees from Kyndalyn Park (to be replanted in July 2014)  Replanted

11. Slide 11: Orchards – Current Focus

    Orchards – Current Focus For personal use only  Almond Division  Continue to search for additional orchards and suitable acreage for future development  Replant 350 acres of the Kyndalyn Park orchard that was removed last year  Review new orchard spraying technology and stage implementation into

12. Slide 12: Orchards – Business Update/Outlook

    Orchards – Business Update/Outlook For personal use only  Almond Division  Harvest is underway and progressing  Harvest has experienced some delays this season due to weather  Increased harvest equipment matrix enabled us to move more equipment into larger orchards as smaller ones complete  Yie

13. Slide 13: Orchards – Costs

    Orchards – Costs For personal use only SHV FY2014 Horticulture Costs Forecast Actual by Percentage Others 14% Labour 19% Harvest 11% Fert & Chem Fixed 20% 11% Water 6% Bee Energy 5% 14% Labour Fert & Chem Bee Energy Water Fixed Harvest Others A significant portion of our horticultural costs are fixe

14. Slide 14: Operations

    For personal use only Operations Bruce van Twest GM Operations Processing SHV processes over 15,000mt of quality almonds and 12,000mt of quality nuts and healthy products 14

15. Slide 15: Operations – What we have done since last year

    Operations – What we have done since last year For personal use only  Carina West  Successfully commissioned kernel pasteuriser  Updated Hulling & Shelling processing design  Fire Suppression System  External Growers - A processing contract (5 years, 4,000 tonne kernel p.a.) has been signed wit

16. Slide 16: Operations – Current Focus

    Operations – Current Focus For personal use only  Carina West  Grinding Hull on site - Milling hull doubles the density of the product and improves transport economics – opens up market  Trialling black and White stock pad tarps - DPI Study has shown they minimise under-tarp condensation and moul

17. Slide 17: Operations - Business Update/Outlook

    Operations - Business Update/Outlook For personal use only  Carina West  Investigating opportunity to offset operating costs by running a biomass power generator powered by hull, shell & field waste  Investigating manufacturing footprint consolidation of all almond processing assets into CW site

18. Slide 18: Trading & Industrial Markets

    For personal use only Trading & Industrial Markets Laurence van Driel GM Trading and Industrial Trading & Industrial Maximising the value of almonds and sourcing the best priced and highest quality product s for Select Harvests 18

19. Slide 19: Trading & Industrial – World Almond Supply vs Demand

    Trading & Industrial For personal use only Tonnes World Almond Supply vs Demand 1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 - 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Total Supply Consumption Almond prices are up

20. Slide 20: USA Almonds - Monthly Shipments

    Trading & Industrial For personal use only USA Almonds - Monthly Shipments 250 200 150 Million lbs 100 50 0 August September October November December January February March April May June July 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 US becoming less reliant on export market

21. Slide 21: Trading & Industrial – What we have done since last year

    Trading & Industrial – What we have done since last year For personal use only  Industrial  Key focus to value add to low grade manufacturing grade product  Value add to the lowest grade material  Skin removal (blanching) allows us to ascertain the damage to the almond and how best to maximize a

22. Slide 22: Trading & Industrial – Business Update/Outlook

    Trading & Industrial – Business Update/Outlook For personal use only  Almonds  Current drought in the USA is causing concern from overseas buyers re. continuity of supply  Buyers seeking secure supply agreements in order to protect their own businesses  The small kernel sizing (USA crop) - compl

23. Slide 23: Trading & Industrial – Markets

    Trading & Industrial – Markets For personal use only Select Harvests Almond Markets FY14 1% 6% 11% 25% Domestic - Australia Export - Inshell (India) Export Kernel - Europe Export Kernel - Middle East Export Kernel - Asia (exc India) 15% Export Kernel - New Zealand 42% Select Harvests enjoys diverse

24. Slide 24: Consumer Marketing

    For personal use only Consumer Marketing Paul Thompson (for Mark Eva, GM Sales & Marketing – Consumer) Sales & Marketing Market leading consumer and industrial brands plus outstanding customer service 24

25. Slide 25: Consumer Marketing – What we have done since last year

    Consumer Marketing – What we have done since last year For personal use only  Maintained branded market share in key categories  Restructured Team  Added relevant and necessary skill sets  Margin Improvement initiatives  Lead our categories with price increase implementation  >$0.5m via produc

26. Slide 26: Consumer Marketing – Current Focus

    Consumer Marketing – Current Focus For personal use only  Step up in the level of Innovation activity  Development of the Lucky brand  Relaunch of Healthy snacking range  New launches into existing categories  New category opportunities investigated  Relaunch of Sunsol Muesli range and additio

27. Slide 27: Consumer Marketing – Business Update/Outlook

    Consumer Marketing – Business Update/Outlook For personal use only  Continued challenging and competitive trading conditions  Commodity cost increases due to poor global crop conditions and high international demand  Further selling price increases commenced  Commercialise on Innovation and Bran

28. Slide 28: Closing

    For personal use only Closing Paul Thompson Managing Director 28

29. Slide 29: SHV – Almond Facts

    SHV – Almond Facts For personal use only  Production Growth  Australian Almond production increased by 60% in CY2013  Export Dominance  In CY2013, Almonds became the 1st Australian horticultural industry to earn A$300M p.a. in export revenue  In CY2014, this is expected to be circa A$500M  Dom

30. Slide 30: SHV - Strategy towards 2018

    SHV - Strategy towards 2018 For personal use only Status 1. CONTROL CRITICAL MASS Secure the critical mass of nuts needed to maximize Commenced OF ALMONDS profitability and leverage the global almond opportunity. 2. IMPROVE YIELD & CROP Improve yield and overall crop value by perfecting on-farm Comm

31. Slide 31: SHV - Almond Division - Risk Mitigation

    SHV - Almond Division - Risk Mitigation For personal use only Area Action Farming Practices • Empowered farm management • Introduced Harvest guidelines to reduce weather exposure Management Tools • Great on-farm KPI’s & reporting • Introduction of Leaf Bomb Pressure Test technology Processing Standa

32. Slide 32: Industry – US & Spanish Market Outlook April

    Industry – US & Spanish Market Outlook April For personal use only US & Spanish Crop  Supply  US 2013 Crop est. 2.0 billion lbs - similar to 2012  2014 Crops - Perfect pollination conditions in Spain and US  Current best guess 2.0 billion pounds  Subjective Estimate May  Objective Estimate Jul

33. Slide 33: Industry Outlook - US Drought

    Industry Outlook - US Drought For personal use only Drought issues remain serious • Some counties have banned water exports • Low State Government water allocations • Zero Federal Government water allocations • Evidence of marginal orchards being removed 33

34. Slide 34: Industry – US Water Outlook

    Industry – US Water Outlook For personal use only US Industry  Northern Region  Federal Central Valley Project - No water this year  Sacramento Valley - also concerned about availability of water  Central Region  San Joaquin Irrigation District (which serves the Escalon, Manteca & Ripon areas)

35. Slide 35: SHV 2014 Crop Update

    SHV – SHV 2014 Crop Update For personal use only  Harvest  60% of crop has been harvested  Conditions more challenging than last year due to wet weather  Sales  54% sold  Market and pricing remains firm  Processing  22% processed  More challenging than last year due to insect damage  Forec

36. Slide 36: SHV - Summary

    SHV - Summary For personal use only  SHV is well positioned  Leadership - Sharper focus on delivering performance and improvement  Industry - healthy product with strong, historical & forecast long term growth prospects (8% p.a.)  Scale - Australia is 2nd largest almond producer  Countercyclica

37. Slide 37: Thank you

    For personal use only Thank you Please direct any queries to: Paul Thompson Paul Chambers Andrew Angus Managing Director Chief Financial Officer Investor Relations +61 3 9474 3544 +61 3 9474 3544 +61 402 823 757 Please note that Select Harvests will update its website shortly - a lot of the material

38. Slide 38: Appendix

    For personal use only Appendix 38

39. Slide 39: Why Almonds? - Australian Almond Industry

    Why Almonds? - Australian Almond Industry For personal use only Company Orchards Processing Sales & Marketing Select Harvests 11,560 acres (4,680 ha) – 15% Primary Processing 30KT Robinvale Consumer, Foodservice & market share Vic Industrial businesses Global Nut Trader Vic, SA & NSW Value Added Pro

40. Slide 40: SHV – Snapshot Today

    SHV – Snapshot Today For personal use only SHV SEGMENTS ALMOND DIVISION FOOD DIVISION Business Almond Orchards & Trading Processing – Processing – Thomastown Sales & Marketing Functions Carina West As at 8/4/2014 Summary of Almond Orchard Portfolio Primary Processor Value Added Processor Food Divisi

41. Slide 41: SHV - Orchards - Geographic Diversity

    SHV - Orchards - Geographic Diversity For personal use only Geographic Diversity Limits exposure to: •Weather •Disease spread •Labour availability •Insect infestation Robinvale (Ouyen) January July Hillston Temp Robinvale to Hillston - Avge Min (Deg C) 15.7 4.3 Distance: 382 km - Avge Max (Deg C) 32

42. Slide 42: SHV - Orchard Profile - A Competitive Advantage

    SHV - Orchard Profile - A Competitive Advantage For personal use only SHV Company Orchards (Owned & Leased) - Age Profile (Years) - % (as at 8 April 2014 - basis Feb 2014 Crop Harvest) . 35.0% 17% of SHV Company 10% of SHV Company Orchards yet to mature Orchards have passed (15% in next year) peak e

43. Slide 43: SHV - Orchard Portfolio

    SHV - Orchard Portfolio For personal use only Bearing Planted SHV Controlled Orchards Acres Hectares Acres Hectares Owned 3,444 1,394 3,663 1,483 Leased 1,481 600 1,481 600 Victoria 4,925 1,994 5,144 2,083 Owned 1,511 612 1,511 612 Leased 3,017 1,221 3,017 1,221 NSW 4,528 1,833 4,528 1,833 Owned 680

44. Slide 44: SHV - Food Division - Brand Summary

    SHV - Food Division - Brand Summary For personal use only • Market leader in the cooking nut category. • Cooking Nut product range: almonds, walnuts, cashews, hazelnuts, brazil nuts, pine nuts, pistachios, macadamias, sunflower seeds and pepitas (value share 36.5% in the MAT to Feb 2014) • Snacking

45. Slide 45: US Drought - Information Sources/References

    US Drought - Information Sources/References For personal use only  San Jose Mercury News, 29 Mar 2014 California Drought: San Joaquin Valley sinking as farmers race to tap aquifer By Lisa M. Krieger http://www.mercurynews.com/drought/ci_25447586/california-drought-san-joaquin-valley-sinking-farmers

46. Slide 46: Operations – Carina West Plant Tour

    Operations – Carina West Plant Tour For personal use only Guide 1 – Green Group Guide 2 – Red Group Guide 3 – Yellow Group Guide 4 – Blue Group Bruce van Twest Davin Wright Tarun Saini Andrew Knight GM Operations Processing Operations Mgr Production Manager Weighbridge Manager  1  1  1  1  2 

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