Select Harvests Limited · ASX:SHV

Select Harvests — H1 FY2014 Earnings Presentation

30 slides from Select Harvests's earnings presentation, Feb 28, 2014

1. Slide 1: Half Year ending 31 December 2013 - Results Presentation

   For personal use only Select Harvests Limited (“SHV”) Half Year ending 31 December 2013 - Results Presentation 28 February 2014 1

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: Agenda

   Agenda For personal use only Overview Results Discussion & Analysis Outlook Summary Appendices 3

4. Slide 4: Overview

   Overview For personal use only  1H14 Net Profit after Tax (“NPAT”) of $18.4m, compared to Reported 1H13 Net Loss after Tax (“NLAT”) of ($19.5m)  1H14 NPAT of $18.4m, compared to Underlying 1H13 NPAT of $8.4m (after excluding the after-tax impact of the write-down of the WA Almond Orchard Project f

5. Slide 5: Overview

   Overview For personal use only  Performance of both divisions improved considerably  Almond Division EBIT $25.0m (based on 2014 crop estimate) - up 106%  Food Division EBIT $4.0m - up 1%  Capitalising on the benefits of integrated and more diversified business model  Almond Division significant

6. Slide 6: Financial Results - Income Statement

   Financial Results - Income Statement For personal use only Financial Result ($m) 1H13 1H14 ($m) ($m)  EBIT of $27.0m (1H13 $14.4m) - up 88%  Almond Div. $25.0m (1H13 $12.1m) Revenue 100.7 98.7  up 106% EBITDA 17.3 28.8 Depreciation (2.9) (1.8)  Food Div. $4.0m (1H13 $4.0m) EBIT 14.4 27.0  up 1%

7. Slide 7: Financial Results - Balance Sheet

   Financial Results - Balance Sheet For personal use only ($m) Period 31/12/2012 31/12/2013 ending Current Assets excl. Cash 79.0 114.1  Net Debt is $79.7m Cash 5.0 3.3 Non Current Assets 167.3 195.4  Gearing (Net Debt to Equity) of 45% Total Assets 251.3 312.7  Marginally up on 1H13, but has fully

8. Slide 8: Financial Results - Cash Flow

   Financial Results - Cash Flow For personal use only ($m) 1H13 1H14  Operating cash flow up at $23.5m  Investing cash flows of ($20.3m) EBITDA 17.3 28.8  Acquisition $16.6m Change in Working Capital (4.2) (2.7)  Tree replant $1.0m Taxes Received 0.9 -  Other $2.7m Net Interest (2.4) (2.6)  Posi

9. Slide 9: Financial Results - Almond Division

   Financial Results - Almond Division For personal use only Reported EBIT ($m) 1H13 1H14 Variance Almond Division 12.1 25.0 106%  Almond Division reported - one segment (post Olam)  FY13 Crop finalised at 12,669 tonnes @A$6.60/kg (as at 30 June 2013 we advised 12,000 tonnes @ A$6.38/kg)  EBIT impac

10. Slide 10: Financial Results - Almond Division

    Financial Results - Almond Division For personal use only Reported EBIT ($m) 1H13 1H14 Variance Almond Division 12.1 25.0 106%  Costs - tight management whilst supporting larger crop and changing some horticultural practices  Processing Volume – 18,915 tonnes total  12,669 tonnes Select Harvests

11. Slide 11: Financial Results - Food Division

    Financial Results - Food Division For personal use only Reported EBIT ($m) 1H13 1H14 Variance Food Division 4.0 4.0 1%  Good result  Revenue of A$64.5 million was down 13.6% (A$74.7 million 1H13)  Driven by the loss of low margin private label contracts  Sales growth  Industrial - Industrial &

12. Slide 12: 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

13. Slide 13: Industry - Outlook January

    Industry - Outlook January For personal use only  US Crop *  Smaller crop  US 2013 Crop est. 2.0 billion lbs - similar to 2012  2nd largest crop in history  Faster harvest  Harvest conditions near perfect  Faster shipping program  Up 5.3% YTD  US Domestic market - up 12%  Exports - up 3% 

14. Slide 14: Industry Outlook - US Drought/Intensifying

    Industry Outlook - US Drought/Intensifying For personal use only Things have got worse in the last week • Drought declared in California • Some counties have banned water exports • Low State Government water allocations • Zero Federal Government water allocations • Marginal orchards being removed 14

15. Slide 15: US Drought - Information Sources/References

    US Drought - Information Sources/References For personal use only  Bloomberg News, 25 Feb 2014 Almond Drought Boosts India Sweets to Aussie Farms: Commodities By Megan Durisin http://www.businessweek.com/news/2014-02-24/almond-drought-boosts-india-sweets-to-aussie-farms-commodities#p3 • “The worst

16. Slide 16: SHV - Outlook

    SHV - Outlook For personal use only  Almond Division  Harvest commenced last week – on track  Orchard maturity profile - largely offsets orchard replant program – 73% of orchard at maturity  Improving productivity & utilisation of existing assets (orchard yield, orchard area, replants, processin

17. Slide 17: 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

18. Slide 18: 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

19. Slide 19: Appendix

    For personal use only Appendix 19

20. Slide 20: SHV - Financial History

    SHV - Financial History For personal use only 2006 2007 2008 2009 2010 2011 2012 2013 SHV Historical Summary Units Total Sales (A$M) 217.9 229.5 224.7 248.6 238.4 248.3 251.3 191.1 EBIT (A$M) 38.4 40.5 27.1 26.8 26.0 22.6 19.6 37.7 EBIT Margin (EBIT/Sales - %) (%) 17.6% 17.6% 12.1% 10.8% 10.9% 9.1%

21. Slide 21: Orchards

    For personal use only Orchards Across three distinct geographic regions with the majority in the economic “sweet spot” 21

22. Slide 22: 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 Proc

23. Slide 23: SHV - Snapshot - as at Feb 2014

    SHV - Snapshot - as at 28 Feb 2014 For personal use only SHV SEGMENTS ALMOND DIVISION FOOD DIVISION Business Almond Orchards & Trading Processing – Processing – Thomastown Sales & Marketing Functions Carina West As at 28/2/2014 Summary of Almond Orchard Portfolio Primary Processor Value Added Proces

24. Slide 24: 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

25. Slide 25: 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 28 Feb 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 ec

26. Slide 26: 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

27. Slide 27: Processing

    For personal use only Processing SHV processes over 15,000mt of quality almonds and 12,000mt of quality nuts and healthy products 27

28. Slide 28: 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

29. Slide 29: Sales & Marketing

    For personal use only Sales & Marketing Market leading consumer and industrial brands plus outstanding customer service 29

30. Slide 30: 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 37% in the MAT to 22.07.12) • Snacking pr

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