Slide 1: Full Year Results Presentation to 30 June 2018 (FY2018)
For personal use only Select Harvests Limited (ASX:SHV) Full Year Results Presentation to 30 June 2018 (FY2018) 28 August 2018
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
Slide 3: FY 2018 Overview - Financials
FY 2018 Overview - Financials For personal use only Almond EBITDA1 Operating NPAT Net Debt EPS Total Dividend Volume Cashflow 15,700 MT $51.7M $18.3M $20.4M $70.8M 23.2cps ↑ 11.3% ↑ 62.3% ↑ $13.6M ↑ 120.3% ↓ $75.1M ↑ 84.1% 12 cps SHV EBIT1 & NPAT ▪ Revenue decrease of 13% to $210.2m as a result of l
Slide 4: FY 2018 Overview - Operations
FY 2018 Overview - Operations For personal use only ▪ Almond Division - Volume 15,700 tonnes (FY 2017 14,100 tonnes) - up 11.3% - Sales price of $8.05/kg (FY 2017 $7.43/kg) - up 8.3% - Production cost per kg - down 8.6% (saved $7m) ▪ Food Division - Strong Industrial sales - Sales growth for Sunsol
Slide 5: FY 2018 Income Statement
FY 2018 Income Statement Income Statement For personal use only $ millions FY 2017 FY 2018 Variance % ▪ Decrease in revenue due to lower sales of domestic branded Almond Volumes MT 14,100 15,700 1,600 11.3% Food product and FY 2017 Almond sales cycle Almond Price Per Kg 7.43 8.05 0.62 8.3% ▪ FY 2018
Slide 6: Movement in SHV Group EBIT
Movement in SHV Group EBIT1 ($M) For personal use only 2.7 1.2 7.2 3.3 1.0 8.7 4.3 5.4 34.9 17.0 Increased volumes, higher pricing and lower cost of production have led to an improved result 6
Slide 7: FY 2018 Balance Sheet
FY 2018 Balance Sheet For personal use only Year Ending Balance Sheet $ millions FY 2017 FY 2018 ▪ Increased current assets - higher inventory levels due to larger Current Assets excl. Cash 135.6 161.7 Almond crop and price Cash 1.1 0.4 Non-Current Assets 343.0 354.5 ▪ Increased non-current assets d
Slide 8: FY 2018 Cash Flow
FY 2018 Cash Flow For personal use only Cash Flow ▪ EBITDA1 is up 62.3% - operational performance $ millions FY 2017 FY 2018 EBITDA1 31.8 51.7 ▪ Increased working capital due to larger 2018 crop volume Change in Working Capital 6.9 (19.8) and increased pricing Tax Paid (29.0) (8.5) Net Interest (5.0
Slide 9: FY 2018 Overview – Safety, Environment, People and Culture
FY 2018 Overview – Safety, Environment, People and Culture Safety FY 2017 FY 2018 FY 2018 Safety measure outcome ▪ SHV’s Zero Harm Safety and Wellbeing Strategy focus is to: For personal use only - Prevent injury before it occurs LTIFR (Lost 15.1 17.4 +15% Time Injury - Improve our safety performanc
Slide 10: Almond Division
For personal use only Almond Division 10 Carina Farm Blossom 2018
Slide 11: Almond Division
Almond Division Almond Division For personal use only $ millions FY 2017 FY 2018 EBIT 13.7 35.4 ▪ Crop volume increased to 15,700 tonnes (FY 2017 14,100 tonnes) - up 11.3% - Crop potential significantly impacted by frost particularly in NSW, with mature tree average yield marginally down - New plant
Slide 12: Yield Performance
Yield Performance For personal use only Impacted by frost Industry Average Yield Industry Average Yield Strong performance vs Industry Standard across all immature age cohorts 12
Slide 13: Almond Outlook
Almond Outlook For personal use only USA ▪ Last Year Shipments - 2.25 billion pounds (1.02 million MT) - up 7% or 150 million pounds (68,182 MT) - demand remains strong - Key Markets Up - China 16%, India 19%, Europe 5% & US 9% - Carry-over Down 10% to 360 million pounds (163,636 MT) - 6 weeks inven
Slide 14: Volume Growth
Volume Growth For personal use only Investment in almond orchards ensures underlying organic earnings growth 14
Slide 15: Food Division
For personal use only Food Division 15
Slide 16: Food Division
Food Division Food Division $ millions FY 2017 FY 2018 For personal use only EBIT 8.0 5.0 ▪ Strong Industrial Sales - Industrial revenue and volumes increased due to higher demand for almonds by Asian food processors - Value-added products (Parboil) attracting strong interest ▪ Sales growth for Suns
Slide 17: Food Division – Priorities
Food Division – Priorities ▪ Industrial Sector For personal use only - FTA and US Trade position with China creates an opportunity to strategically grow value-added almonds into food manufacturers - Create new product solutions for specific industry sectors ▪ Consumer Sector - Lucky Brand ▪ China Tr
Slide 18: Business Outlook
For personal use only Business Outlook Bunargool Orchard Blossom 2018 18 Photo Carina Farm Blossom 2018
Slide 19: Change of Financial Year
Change of Financial Year For personal use only Select Harvests is changing its Financial Year end from 30 June to 30 September and is therefore required to complete a three-month Transition Period (1 July 2018 – 30 September 2018) During the Transition Period: - Almond Division - No 2019 crop income
Slide 20: Select Harvests – in control of our destiny
Select Harvests – in control of our destiny For personal use only To Deliver Sustainable Stakeholder Returns by being a Leader in the Supply of Better Mission For You Plant Based Foods Trust & Respect Integrity & Diversity Sustainability Performance Innovation Values Treat all stakeholders with trus
Slide 21: Prepared for the Future
Prepared for the Future For personal use only Closing the Loop Waste for H2E is potash. Potash is being composted with other orchard waste and returned to orchards to ameliorate the soil Objective: Sustainability & cost savings New Varieties Trial New local high-yielding and/or self-pollinating vari
Slide 22: 2019 Top Priorities
2019 Top 10 Priorities For personal use only 1. Maximize 2019 Crop volume - Chill hours achieved - in the final stages of pollination 2. Almond Pool Trade – Free Trade Agreements and currency are opportunities 3. Cost Reductions - Continue to reduce cost per kg - FY 2019 focus on both processing fac
Slide 23: Thank you
For personal use only Thank you Please direct any queries to: Paul Thompson Brad Crump Andrew Angus Managing Director Chief Financial Officer Investor Relations +61 3 9474 3544 +61 3 9474 3544 +61 402 823 757 Please note that background material/data regarding the global almond industry can be found
Slide 24: Select Harvests - Financial History
For personal use only Select Harvests - Financial History 2006 2007 2008 2009 2010 2011 2012 2013 2014* 2015 2016 2017 2018 SHV Historical Summary Units Total Revenue (A$M) 218.0 229.8 224.8 248.7 239.1 250.0 251.3 191.1 188.3 223.6 286.2 242.1 210.2 EBIT (A$M) 38.4 40.5 27.1 26.8 26.0 22.6 19.6 37.
Slide 25: Almond Orchards – Our productive foundation
Almond Orchards – Our productive foundation For personal use only Geographic diversity Secure access to diverse limits exposure to: water sources: − Weather − River Water − Disease spread − Aquifers − Insect infestation Positions the company to maximise harvest volume & reduce variance. Enables sequ
Slide 26: Select Harvests – Orchard Profile
Select Harvests – Orchard Profile For personal use only Total Planted & Under Select Harvests Planted Under Development Development Almond orchard portfolio (as at 30 June 2018) (as at 30 June 2018) (as at 30 June 2018) Acres Hectares Acres Hectares Acres Hectares Central region Company Owned 4,183
Slide 27: Select Harvests – Orchard Age Profile
Select Harvests – Orchard Age Profile For personal use only Growth and improvement occurred in SHV orchard portfolio in recent years - acquisition, replants, greenfields 27
Slide 28: Targeting an Above Average Yield Per Acre @ Maturity
Targeting an Above Average Yield Per Acre @ Maturity For personal use only Harvest Volume (tonnes) per acre Harvest Volume (tonnes) per acre Year based on 1.2 Tonnes per Acre @ based on 1.3 Tonnes per Acre @ Maturity Maturity 1 0.0 0.0 2 0.0 0.0 3 0.3 0.3 4 0.5 0.5 5 0.8 0.8 6 1.0 1.0 7+ 1.2 1.3 Not
Slide 29: Tree Nut Pricing
Tree Nut Pricing For personal use only Almonds are currently the best value in the basket - driving consumption 29
Slide 30: Growing Costs
Growing Costs For personal use only FY 2018 Crop - Cost per Kg ▪ Overall 2018 Crop costs per Kg have reduced by 9% ▪ 2018 focus was on horticultural costs ▪ Reductions achieved in input and maintenance costs - no yield impact ▪ Water prices remains the major risk for achieving further reductions ▪ 2
Slide 31: Almond Market Outlook – US Shipments July 2018
Almond Market Outlook – US Shipments July 2018 For personal use only US Export Shipments US Domestic Shipments US Total Shipments Last Year This Year Growth Growth Last Year This Year Growth Growth Last Year This Year Growth Growth (million lbs) (million lbs) (million lbs) (%) (million lbs) (million
Slide 32: US Water Conditions – California Drought Monitor
US Water Conditions – California Drought Monitor For personal use only Source: Pacific Institute, Oakland California 86% of California is Abnormally Dry or in Drought 32
Slide 33: Useful Almond Industry websites
Useful Almond Industry websites Industry Associations ▪ Californian Almond Board www.almondboard.com For personal use only ▪ Almond Board of Australia www.australianalmonds.com.au Industry Reports ▪ US Crop Forecasts (Subjective, Objective) http://www.almonds.com/growers/resources/crop-forecasts/tc-