Sanford Limited · NZX:SAN
Sanford — H1 FY2020 Earnings Presentation
22 slides from Sanford's earnings presentation, May 2020
Slide 1: Analyst Result Briefing 2020
SANFORD i ANALYST RESULT BRIEFING : 2020 & (a
Slide 2: Disclaimer
DISCLAIMER This presentation contains not only a review of operations, but also some forward looking statements about Sanford Limited and the environment in which the company operates. Because these statements are forward looking, Sanford Limited’s actual results could differ materially. Media relea
Slide 3: COVID-19: Impacts
COVID-19: Impacts • Asian trade impacted in January Operational Impact • More widespread impacts from • Nervous staff end of March • Travel restrictions • Supply chain interruption (borders, freight) • Some closures (Enzaq, our retail stores) Demand Impact • Food service ceased (home and abroad) • F
Slide 4: COVID-19: Mitigation
COVID-19: Mitigation Operational Mitigation • Sanford responded rapidly to changing operational requirements • Distancing measures and market conditions • Enhanced hygiene and PPE • Innovative thinking • Successful working from home Demand Mitigation • New retail product mix and packaging options •
Slide 5: H1 FY20: Antarctic toothfish and impacts of Covid-19 drove a result short on expectations
H1 FY20: Antarctic toothfish and impacts of Covid-19 pandemic drove a result short on expectations, not without positives CATCH/HARVEST VOLUME SALES VOLUME REVENUE ADJUSTED EBIT 52k GWT 51k GWT $246M $23.2M Excluding Excluding Excluding Excluding -7 % FY19 pelagic -13 % FY19 pelagic -7% FY19 pelagic
Slide 6: Mixed performance across the business with aquaculture doing very well
Mixed performance across the business with aquaculture doing very well Key drivers of H1 Adjusted EBIT change NZD m Divested Operational Timing Strategy in Action Covid-19 -1m +9m
Slide 7: Wild Catch
Wild Catch FRESH FROZEN Wild catch GWT sales volume excl. Pelagics -8% H1 profit contribution (excl. Pelagics) vs H1 LY 48% down GWT (000’s) 40 Positives 20 • San Granit in full operation. Deepwater fleet catch up 18% vs H1 LY • Vessel optimization program progressing well with increased 0 H1 18 H1
Slide 8: King Salmon
King Salmon SALMON Salmon GWT sales volume +2% H1 profit contribution vs H1 LY up +86% 2,500 Positives 2,000 1,500 • Excellent growth of the fish over the half-year has added to an GWT increased biomass of stock in water aligning with increased 1,000 consent limits. Oxygenation of water has proven s
Slide 9: Greenshell Mussels
Greenshell Mussels MUSSELS H1 profit contribution vs H1 LY up +16% Greenshell mussel GWT sales volume 20 +5% Positives 18 • Diversifying market mix strategy continuing to drive strong GWT (000’s) pricing for half shell product supporting improved EBIT per kg 16 • Favourable South Island growing cond
Slide 10: Geographical spread a benefit against Covid-19 implications
Geographical spread a benefit against Covid-19 implications 48% • Increase in sales to Europe driven by 43% diversification of mussels away from North 40% America and higher white fish sales • North America also impacted by lower toothfish, squid and Covid-19 but higher orange roughy 18% 13% 13% 14%
Slide 11: Sanford Strategy
Integrated thinking and delivery across our businesses Business Excellence Framework Sanford Strategy Sustainability as the Foundation PURPOSE AMBITION VISION We share the natural To be the Best Seafood goodness of our oceans with $1 EBIT GW kg by Company in the World uncompromising care 2023 ORGANI
Slide 12: Strategic priorities unchanged – Rejuvenation, Innovation, Channel Focus
Strategic priorities unchanged – Rejuvenation, Innovation, Channel Focus Key projects for H2 • New Marine Extracts Centre construction has commenced – enables nutraceutical NPD pipeline INNOVATION CUSTOMER AND using a variety of marine based sources CONSUMER • Growing online sales, new packaging for
Slide 13: Diversity across fishing and aquaculture, in volume and value
Diversity across fishing and aquaculture, in volume and value HARVEST VOLUME SALES REVENUE King salmon King salmon 4% 13% Greenshell Greenshell mussels Fishing - mussels Fishing - 33% deepwater 27% deepwater 53% 48% Fishing - inshore Fishing - H1 FY20 inshore H1 FY20 10% 12% (excludes Other Revenue)
Slide 14: Diversity across fishing, in volume and value
Diversity across fishing, in volume and value HARVEST VOLUME DEEPWATER VOLUME Factory vessels Fishing - 95% deepwater 53% Scampi 2% H1 FY20 Toothfish 3% REVENUE DEEPWATER REVENUE Scampi Factory Fishing - 15% vessels deepwater 77% 48% H1 FY20 Toothfish 8%
Slide 15: Opportunities in the Face of Covid-19
Opportunities in the Face of Covid-19 • Sanford culture experiencing new pride and purpose • The image of seafood as a healthy and sustainable protein • Momentum encouraging agility and speed in innovation • Channel and market diversification • Market resilience in Australia, NZ and many parts of As
Slide 16: Market Outlook in the Face of Covid-19
Market Outlook in the Face of Covid-19 • Mixed but with green shoots as some European markets and US states begin to open up • Online a clear area of growth • ‘Looking Forward Team’ formed in April, highlighted possible new 'norm’ and how best to serve our customers • Freight costs likely to be ongo
Slide 17: Thank You – Questions?
THANK YOU QUESTIONS?
Slide 18: Appendices
APPENDICES
Slide 19: Solid gearing and falling debt vs H1 FY19
Solid gearing and falling debt vs H1 FY19 GEARING DEBT Net DEBT / EBITDA* 28.4% $165.9M 1.93x FY19 1.91x Flat -2% * Rolling basis and adjusted for IFRS16 in comparatives ROCE^ TOTAL EQUITY Liquidity Ratio** 6.4% $585M 139% Flat -1% FY19 136% ^Rolling 12 mth average * * Available bank facilities vs u
Slide 20: YTD Capital Investments
YTD Capital Investments • Capital expenditure of $23.8m in H1 up 18% on last year’s interim period spend • Focus has been on: • ‘Beyond food’ strategy – Commenced groundwork for new marine extract plant in Blenheim • Vessel optimisation improvements such as the half-life rebuild of the San Ikawai, a
Slide 21: HY20 Financial Results - GAAP to Non GAAP reconciliation
HY20 Financial Results - GAAP to Non GAAP reconciliation Unaudited Financial half year 2020 2019 $m $m Revenue 245.5 265.0 Gross Profit 47.6 54.2 % 19.4% 20.4% Net Expenses & Other Income (28.6) (31.3) Reported net profit (GAAP) 19.0 22.9 Add back: Net interest and tax expense 9.5 13.2 Net (gain) on
Slide 22: GAAP To Non-GAAP Reconciliation
GAAP To Non-GAAP Reconciliation Non-GAAP Profit Measures Sanford's standard profit measure prepared under New Zealand GAAP is net profit. Sanford have used non-GAAP measures when discussing financial performance in this document. The Directors and management believe that these measures provide usefu