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 2019 28 August 2019
Slide 2: Agenda
Agenda 1. Highlights 2. Sustainability 3. Group Results 4. Divisional Performance 5. Strategy Update 6. FY19 Outlook Appendices: I. NZ IFRS Reconciliation II. Disclaimer Scales Corporation Limited – 2019 Half Year Results 2
Slide 3: Highlights
Highlights 1
Slide 4: Operational and Strategic Highlights
Operational and Strategic Highlights Record interim result reflecting profit on divestments • Underlying EBITDA for continuing businesses of $47.3m, in line with 1H18 ($47.1m). • Apple volumes ahead of forecast (actual export volume of 3,822k TCEs vs forecast of 3,620k TCEs): Volumes in line with
Slide 5: Strategy Refresh Update
Strategy Refresh Update Continued solid performance in implementing Strategy Refresh • A number of milestone achievements during 1H19: The sale of Polarcold to Emergent Cold settled in May 2019 following OIO approval. Establishment of a New Zealand Joint Venture petfood operation with Alliance i
Slide 6: Sustainability
Sustainability 2
Slide 7: Sustainability Update
Sustainability Update Continuing to minimise our impact on the environment • Our carbon footprint, and how we can reduce this, continues to be a key focus. We have established a number of goals following our inaugural carbon footprint calculation in 2018: Reduce electricity consumption by 3% and o
Slide 8: Sustainability Developments
Sustainability Developments Ongoing commitment to being an Employer of Choice • Health and Safety continues to be a top priority: Critical risk training undertaken with all Mr Apple permanent staff, will be completed at Balance Cargo and Meateor by the end of the year. Roll out of the Mr Apple f
Slide 9: Group Results
Group Results 3
Slide 10: Group Financial Summary
Group Financial Summary Record result impacted by both strategic and NZ IFRS changes • 1H19 results are impacted by the following items: Divestment of Polarcold, resulting in a gain on sale of $73.0m. Establishment of Meateor NZ joint venture, giving rise to a $10.1m gain on sale and a further $
Slide 11: Divisional Overview
Divisional Overview Revenue growth within all divisions • Horticulture – higher expected crop with strong sales into Asia endorsing our ongoing strategy to focus on premium varieties. • Food Ingredients – a strong performance during a period of change, impacted by one-off inventory revaluation. • Lo
Slide 12: Balance Sheet
Balance Sheet Balance Sheet $Millions Jun-19 Jun-18 Dec-18 Current Assets (excluding Cash) Significant capacity for investment Trade Debtors 94.9 73.4 22.9 Inventory 34.0 27.8 45.4 Agricultural Produce 59.1 61.6 20.5 Other 8.3 5.7 7.3 • Balance sheet changes reflect the impact of the Liqueo 196.3 16
Slide 13: Divisional Performance
Divisional Performance 4
Slide 14: Horticulture – Volumes
Horticulture – Volumes 2019 volumes ahead of forecast, markets mixed • Excellent crop with Mr Apple total own grown export volumes of 3.8m TCEs: On par with 2018 volumes and ahead of 2019 forecast volumes, notwithstanding the ongoing orchard redevelopment programme. Export packout of 79%, ahead
Slide 15: Horticulture – Strategy and Markets
Horticulture – Strategy and Markets Validation of marketing focus • Continued strong focus on Asia and Middle East markets: Excellent performance in 2019 with volumes up notably on recent years (sales to this market are expected to comprise 64% of all season sales, a new record), with strong prici
Slide 16: Food Ingredients - Strategy
Food Ingredients - Strategy Excellent progress on execution of the divisional strategy • Considerable change to the Food Ingredients divisional structure: Full 6 months of trading of Shelby. Integration of Alliance JV from April 2019. • Developing a $25m EBITDA division: Progress and achieveme
Slide 17: Food Ingredients - Performance
Food Ingredients - Performance Solid result during a period of change • Positive 6 months of trading from Shelby. • Encouraging impact of joint venture collaboration: Additional value being obtained from merging supply chain capabilities and customer relationships. • Meateor Group performance impa
Slide 18: Logistics
Logistics Trading slightly ahead of 1H18 • Balance Cargo operations expanded in Christchurch with additional warehouse space. • Increased sales resource in Melbourne. Opportunity to capitalise on forecast growth in the Australasian agricultural products sectors. • Ongoing commitment to expansion o
Slide 19: Strategy Update
Strategy Update 5
Slide 20: Strategy Update
Strategy Update Continued focus on pure agribusiness • Our strategy focuses on: Diversifying our operating units, ensuring a more sustainable and robust earnings profile. Retaining a strong market focus on product innovation and in-market distribution and representation. Investment preferences
Slide 21: FY19 Outlook
FY19 Outlook 6
Slide 22: Full Year Outlook for 2019
Full Year Outlook for 2019 Underlying Net Profit Guidance of $32.0m to $37.0m reaffirmed • Implies an Underlying EBITDA range of $49.0 million and $55.0 million, from continuing operations, on a like-for- like basis: • Horticulture: Export volumes in line with prior year. Asia and Near Markets d
Slide 23: Appendices
Appendices: “= A) od
Slide 24: Appendix I - Reconciliation of Underlying to Reported Measures
Appendix I - Reconciliation of Underlying to Reported Measures Reconciliation of Divisional Underlying Profitability to Reported Profitability Group Horticulture Food ingredients Logistics Corporate and eliminations 1H19 1H18 1H19 1H18 1H19 1H18 1H19 1H18 1H19 1H18 EBITDA Underlying 47.3 47.1 41.3 4
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