Slide 1: Annual Results Presentation
SCALES CORPORATION LIMITED Bringing Nutrition to the World Annual Results Presentation For the Year Ended 31 December 2023 22 February 2024
Slide 2: Agenda
1. FY23 Results I. Summary II. Group Performance III. Divisional Performance IV. Capital Management V. Sustainability 2. FY24 Outlook Appendices: A. NZ IFRS Reconciliation B. Disclaimer Scales Corporation Limited – 2023 Full Year Results 2
Slide 3: 1. FY23 Results
FY23 Results” Z \ 1.
Slide 4: I. Summary
I. Summary
Slide 5: Commendable Group performance in a disrupted year
✓ Commendable Group performance in a disrupted year, underpinned by strong Global Proteins earnings ✓ Performance benefited from diversified strategy ✓ Underlying result at the top end of FY23 Guidance range: ✓ Underlying* NPAT Attributable to Shareholders of $19.0m (2022: $27.6m), down 31% ✓ Report
Slide 6: Key figures for FY23
137,477 MT $565.4m 26,010 10.8% Petfood ingredients TEU2 equivalents Revenue ROCE3 sold1 (2022: $619.2m) managed (2022: 13.5%) (2022: 158,595) (2022: 27,580) 19.0 cents 3,920,000 $12.0m 2,733,000 TCEs of apples TCEs of own-grown per share paid Net cash (2022: 19.0 cps) exported4 (2022: $27.0m) apple
Slide 7: II. Group Performance
II. Group Performance
Slide 8: Positive results in a testing year
Positive results in a testing year • Reported NPAT Attributable to Shareholders of $5.2m, down 73% (2022: $19.4m): • The impact of Cyclone Gabrielle and market conditions have resulted in NZ IFRS goodwill impairment and asset write-downs at Mr Apple (post-tax earnings impact of $10.9m) • Underlying
Slide 9: Underlying NPAT, EBITDA and Revenue
Underlying NPAT Underlying EBITDA Revenue Attributable to Shareholders Scales Corporation Limited – 2023 Full Year Results 9
Slide 10: Continuing to benefit from diversified strategy
Continuing to benefit from diversified strategy • Expansion of Global Proteins division providing strong foundation for future growth: • Excellent progress made with Meateor Australia and Esro Petfood, with both businesses operational by 4Q23 • Resilient Horticulture result following adverse effects
Slide 11: Global Proteins Horticulture Logistics
Global Proteins Horticulture Logistics Scales Corporation Limited – 2023 Full Year Results 11
Slide 12: Scales continues to operate with a strong financial position
Scales continues to operate with a strong financial position • Movement in working capital primarily reflects realignment of trade and other receivables, trade and other payables and inventories in line with historical levels • Movement in Net Cash primarily relates to: ◦ Capital expenditure (includ
Slide 13: III. Divisional Performance
III. Divisional Performance
Slide 14: Solid results during post-COVID inventory rebalancing
Solid results during post-COVID inventory rebalancing • FY23 profit margins in line with FY22: ◦ 2023 includes a full year of contribution from Fayman • Movement in revenue, Underlying EBITDA and volumes reflects: ◦ Petfood ingredient customers returning to lower, pre-COVID inventory levels, resulti
Slide 15: Creating growth in unit revenue and EBITDA
Creating growth in unit revenue and EBITDA Petfood Ingredients Revenue and Underlying EBITDA / KG • Key performance drivers: ◦ Increased % processed vs traded product, which drives greater margin ◦ Change in species mix to higher margin products (e.g. beef) ◦ Introduction of blending and new product
Slide 16: Delivering on our strategy
Delivering on our strategy • Commissioned the Meateor Australia plant, with first sales made in Q423 • Established Esro Petfood joint venture and commissioned the first processing line in Belgium in Q423: ◦ The plant has already commenced salmon and beef processing, sourced from the Netherlands ◦ Ot
Slide 17: Commendable results given impacts of Cyclone Gabrielle
Commendable results given significant physical, financial and volumetric impacts of Cyclone Gabrielle • Decline in revenue and Underlying EBITDA primarily due to lower volumes: ◦ Margins remain in line with 2022 • 18% decrease in Mr Apple total own-grown export volumes: ◦ Continued increased focus o
Slide 18: Evidence of the fruits of our team's hard work
Evidence of the “fruits” of our team’s hard work • Impact of damage from Cyclone Gabrielle expected to be largely limited to the 2023 season: ◦ 2024 volumes and performance expected to revert to more normal levels, with volumes expected to increase to around 3.4 million TCEs ◦ Total planted orchard
Slide 19: Higher in-market apple prices helped compensate for lower volumes
Higher in-market apple prices helped compensate for lower volumes • Strong finish to the season due, in part, to limited supply in key markets, which contributed to higher in-market pricing • Supported by marketing activities undertaken across the Asia & Middle East region included: ◦ Customers supp
Slide 20: Steady results delivered by the Logistics division
Steady results delivered by the Logistics division • Decrease in revenue to $92.6m (2022: $123.3m) • Decrease in Underlying EBITDA to $4.3m (2022: $6.6m) • Ocean freight volumes impacted by Cyclone Gabrielle and geopolitical tensions in key trade routes • Airfreight volumes in part affected by a slo
Slide 21: IV. Capital Management
IV. Capital Management
Slide 22: Continuing to invest in line with divisional strategies
Continuing to invest in line with divisional strategies • ROCE affected by lower FY23 earnings • A significant proportion of capital expenditure for FY23 was Cyclone-related, principally in respect of the re-planting and grafting of trees • Other material capital expenditure related to capital work-
Slide 23: V. Sustainability
V. Sustainability,’
Slide 24: Governance, People and Environment
Governance • Prepared our Climate Related Disclosure report, which will be released in April 2024 People • Positive progress at Mr Apple on its people strategy, including annual leadership programmes and new digital systems • Cyclone recovery support included donations of $250,000, tailored assistan
Slide 25: 2. FY24 Outlook
2. FY24 Outlook
Slide 26: Group update
Group update • Pleased to re-confirm Guidance as previously advised of Underlying Net Profit after Tax Attributable to Shareholders of between $30.0 million to $35.0 million, implying: ◦ An Underlying Net Profit after Tax range of between $47.0 million and $55.0 million ◦ An Underlying EBITDA range
Slide 27: Appendices
Appendices
Slide 28: NZ IFRS Reconciliation
Scales Corporation Limited – 2023 Full Year Results 28
Slide 29: NZ IFRS Reconciliation
Scales Corporation Limited – 2023 Full Year Results 29
Slide 30: 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 person for any loss (includi