Scales Corp. Ltd. · NZX:SCL
Scales — Shareholder Meeting (June 2018)
29 slides from Scales's shareholder meeting presentation, Jun 13, 2018
Slide 1: Scales Corporation 2018 Annual Shareholders Meeting
SCALES CORPORATION LIMITED GROWING YOUR DIVERSIFIED AGRIBUSINESS 2018 Annual Shareholders Meeting 13 June 2018
Slide 2: Agenda
AGENDA • Welcome • Chairman’s review • Managing Director’s review • Ordinary business and resolutions Scales – 2018 Annual Shareholders’ Meeting June 2018 2
Slide 3: Chairman's Review
CHAIRMAN’S REVIEW Delivering on our strategy. • Consolidated our position in challenging conditions • Re-focused group investment / growth strategy • Completed the acquisition of OceanAir • Continued progress on sustainability • Capital redeployment enabled with Coldstores divestment Scales – 2018 A
Slide 4: Managing Director's Review
MANAGING DIRECTOR’S REVIEW 1. Year in Review 2. Sustainability progress 3. Strategy Update 4. Looking Ahead and Investor Returns Scales – 2018 Annual Shareholders’ Meeting June 2018 4
Slide 5: Year in Review
we YEAR IN REVIEW
Slide 6: Scales by the Numbers
SCALES BY THE NUMBERS Revenue Underlying EBITDA Underlying Net Profit $399.1m $62.0m $32.7m 7% increase 9% decrease 15% decrease ROCE EPS Dividends declared 22.6 cents 19.0 cents 16% per share per share (2016: 21%) (2016: 27.4 cents per share) (2016: 14.5 cents per share) 6
Slide 7: 5 Year Performance Trend
5 YEAR PERFORMANCE TREND 2017 result consolidates our recent growth • Five year growth trend in EBITDA and NPAT maintained. • We are continuing to explore options to grow and rebalance the portfolio. Underlying EBITDA* Underlying NPAT* $67.9m $38.6m CAGR 10% $61.4m $62.0m $34.8m $32.7m CAGR 13% $42.
Slide 8: Summary Financial Performance
SUMMARY FINANCIAL PERFORMANCE Delivering revenue growth and above target return on capital • Revenue $399.1m, up 7% on 2016. Income Statement • Underlying* EBITDA $62.0m, at the 2017 2016 top end of previously provided $ Millions Actual Growth % Actual Growth % guidance. Revenue 399.1 7% 373.9 24% •
Slide 9: 2017 Divisional Highlights
2017 DIVISIONAL HIGHLIGHTS Resilience and a focus on strategy across the Group Horticulture – solid performance despite challenges. 1 • Better packhouse efficiencies with Longview integration now complete. • Excellent results in challenging conditions. Great momentum for Dazzle®. • Asia and the Midd
Slide 10: Divisional EBITDA Trend
DIVISIONAL EBITDA TREND Strong performance improvement from Storage & Logistics Horticulture and Food Ingredients delivering solid results Trends in Underlying Divisional EBITDA ($m) Horticulture Storage & Logistics Food Ingredients $9.2m $45.3m CAGR 8% CAGR 14% $19.1m $8.0m $40.0m $7.6m $38.9m CAGR
Slide 11: Coldstores Sale Announced
COLDSTORES SALE ANNOUNCED Opportunity to redeploy capital more effectively Coldstores versus Rest of Scales Group • Agreement entered into with Emergent Cold to sell shares in Polarcold for $151.4m. 30% • Low return on capital versus rest of group and 19% other opportunities available. • Sale subjec
Slide 12: Strong Balance Sheet
STRONG BALANCE SHEET Maintaining excellent financial position • We continue to exceed Return on Capital Employed targets and maintain considerable headroom in our banking covenants. • Well placed for strategic acquisitions given strong financial position (further bolstered by Coldstores divestment).
Slide 13: Sustainability
2 SUSTAINABILITY
Slide 14: Sustainability
SUSTAINABILITY Journey progressing to plan • Full review of the business in 2017: Scales’ sustainability framework ➢ Group Sustainability and Health & Safety role established. ➢ Evaluated current position and identified KPIs. • Three areas of focus to future-proof our business: ➢ Being an Employer o
Slide 15: Being an Employer of Choice
BEING AN EMPLOYER OF CHOICE Sustainability starts with our people • Committed to the goal. • Proud of what we do already. ➢ Company-wide training and investment in our staff. ➢ Collaboration with WINZ. ➢ Efforts to promote diversity. • But keen to understand what we don’t know. ➢ 2018 staff-wide eng
Slide 16: Health and Safety
HEALTH AND SAFETY Remains our #1 priority • Big push to standardise policy and procedures across the Group. ➢ Taking best practice and rolling it out. ➢ Replicating positive H&S culture. ➢ Leveraging processes that already work – e.g. forklift coach training at Mr Apple, applied to Group. • And inve
Slide 17: Strategy Update
3 STRATEGY UPDATE
Slide 18: Our Strategy
OUR STRATEGY A greater focus on pure agribusiness • We have refined our group investment / growth strategy, adopting a greater focus on pure agribusinesses. • We will focus on opportunities that play well to our strengths: ➢ Fully-vertically integrated. ➢ Export-led. ➢ Add value from our Chinese rel
Slide 19: Our Investment Universe
OUR INVESTMENT UNIVERSE Agribusiness encompasses the following primary industries The Primary Sector accounts for: Innovative Processed Food Agriculture Dairy, Meat & Wool, Animal products, Arable products, 79.2% Poultry and eggs of New Zealand’s merchandise exports Fisheries / Apiculture Aquacultur
Slide 20: Approach to Capital Allocation
APPROACH TO CAPITAL ALLOCATION Scales’ Vision: To be the foremost investor in, and grower of, New Zealand agribusinesses by leveraging our unique insights, experience, and access to collaborative synergies. Our long-term goal: To generate a long-run average 15% Return on Capital employed across our
Slide 21: Looking Ahead and Investor Returns
4 LOOKING AHEAD AND INVESTOR RETURNS
Slide 22: Trading Update
TRADING UPDATE The outlook for Scales remains positive • Horticulture: Mr Apple Gross Harvest & Export Packout ➢ Total pick, up 14% to 5.1m apples. ➢ ~2/3rd of fruit packed to date. Packout expected 5.5 85% 81% 80% to be in line with long run averages. 5.1 80% 5.0 75% 73% 71% ➢ Slightly more than 1/
Slide 23: Dividends
DIVIDENDS • Total of $0.18 per share in cash dividends paid in respect of 2017: ➢ No change from the $0.18 total dividend per share in 2016. ➢ Represents a gross dividend yield of 7.0% on the average daily share price in 2017 (2016: 8.3%). Gross Dividends Gross Avg. Share Price Dividend EPS Paid Pay
Slide 24: Ordinary Business and Resolutions
ORDINARY BUSINESS AND RESOLUTIONS
Slide 25: Resolution: Auditor's Remuneration
RESOLUTION 1 That the Board is authorised to fix the auditor’s remuneration for the coming year. Scales – 2018 Annual Shareholders’ Meeting June 2018 25
Slide 26: Resolution: Re-election of Tim Goodacre
RESOLUTION 2 Having retired by rotation, that Tim Goodacre be re-elected as a Director. Scales – 2018 Annual Shareholders’ Meeting June 2018 26
Slide 27: Resolution: Re-election of Mark Hutton
RESOLUTION 3 Having retired by rotation, that Mark Hutton be re-elected as a Director. Scales – 2018 Annual Shareholders’ Meeting June 2018 27
Slide 28: Voting & Questions
VOTING & QUESTIONS
Slide 29: Disclaimer
DISCLAIMER Please do not read this presentation in isolation This presentation supplements our full year results announcement dated 28 February 2018 and Annual Report dated 29 March 2018. It should be read subject to and in conjunction with the additional information in those releases and other mate