Select Harvests Limited · ASX:SHV

Select Harvests — Investor Day (March 2015)

43 slides from Select Harvests's investor day presentation, Mar 18, 2015

1. Slide 1: 2015 Management Briefing & Site Tour Presentation

   For personal use only Select Harvests Limited (“SHV”) 2015 Management Briefing & Site Tour Presentation 19 March 2015

2. Slide 2: Introduction & Overview

   For personal use only Introduction & Overview Paul Thompson Managing Director 2 2

3. Slide 3: 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

4. Slide 4: Agenda

   Agenda For personal use only 7.00am Introduction to Select Harvests & Business Overview - Paul Thompson (Managing Director) – 10 mins 7.10am Finance - Paul Chambers (Chief Financial Officer & Company Secretary) – 15 mins 7.25am Human Resources - Carolyn Barbuto (General Manager Human Resources) – 10

5. Slide 5: Aims for the Day

   Aims for the Day For personal use only  Explain our business and our industry to you – yesterday, today & into the future  Understand the growth opportunities and challenges – growth from productivity and new markets/channels  Understanding the funding required to grow Select Harvests – significa

6. Slide 6: 2015 Crop Update

   2015 Crop Update For personal use only  Harvest Progress Update – 55% of crop harvested (this time last year 30%)  All Non-Pareil (premium value nuts) harvested  Volume Update – 13,400 tonnes (in line with previous guidance from 1H15 Results on 26 Feb 2015)  Processing Update – 10% of est. crop

7. Slide 7: Productivity – Controllable Improvements

   Productivity – Controllable Improvements For personal use only  People/OHS/Safety – Right people, right training, right systems, right resources  Orchard Productivity – investing incrementally more in crop production & yield initiatives to capture significantly more crop value  Harvest Productivi

8. Slide 8: Finance

   For personal use only Finance Paul Chambers Chief Financial Officer & Company Secretary 8 8

9. Slide 9: SHV Asset Base (as at December 2014)

   SHV Asset Base (as at 31 December 2014) For personal use only $ Million Plant, Property & Equipment (land, irrigation assets, processing plant) $119 Biological assets (almond trees) $112 Working capital (mainly growing crop on the trees) $120 Intangibles (water and brands) $48 Net debt ($99) Other (

10. Slide 10: Returns from existing asset base – Key Drivers

    Returns from existing asset base – Key Drivers For personal use only  Earnings Drivers  Revenues (yield x price/kg) less Production Costs (farm and harvest costs + processing costs) = EBIT  Sensitivities  Price impacted by quality and product mix, global market prices and AUD : USD exchange rate

11. Slide 11: Returns from existing asset base – Key Drivers

    Returns from existing asset base – Key Drivers For personal use only  Existing portfolio – 18,000 acres  Circa 13,000 acres almond trees,  60% owned, 40% leased,  Average age 11 years old,  Unplanted land bank of 5,000 acres  Assuming an average industry yield of 1.2 MT/acre can be achieved: 

12. Slide 12: Funding Growth

    Funding Growth For personal use only  Investment Focus 1. Acquire mature cash generating almond orchards 2. Develop green field almond orchards 3. Invest in risk mitigation and quality : Frost fans, increased harvest matrix, pasteuriser, dryer 4. Invest in energy savings and sustainability: Cogen 5

13. Slide 13: Human Resources

    For personal use only Human Resources Carolyn Barbuto General Manager Human Resources 13 13

14. Slide 14: Key Activities & Outcomes – Last Months

    Key Activities & Outcomes – Last 12 Months For personal use only  OH & S  Stabilised OH & S Performance  Focus on continuous process improvement  Immediate management of injuries & implementation of corrective actions  Introduced OH & S Employee Calendar  Environment & Sustainability  Zero In

15. Slide 15: Key Activities – Next Months

    Key Activities – Next 12 Months For personal use only  O H & S Strategy - Next step change required  OH & S Culture  Communication  Training & education  Analysis of data focusing on specific areas  Demographics  Manual Handling  Safe Operating practices  Environment & Sustainability  Ener

16. Slide 16: Key Activities – Next Months

    Key Activities – Next 12 Months For personal use only  Learning & Development  Training  Food Safety -raise the bar to meet increased community expectations  All new staff horticulture skills to similar level of existing employees  Facilitate on the job training for new tools eg digital vs pape

17. Slide 17: Orchards

    For personal use only Orchards Peter Ross General Manager Horticulture 17 17

18. Slide 18: Key Activities & Outcomes – Last Months

    Key Activities & Outcomes – Last 12 Months For personal use only  Existing infrastructure upgrades  Replacement of drip line on orchards with sub surface installations – improved water & fertilizer distribution  Upgrading of pump sheds, filtration & fertilizer distribution systems – energy saving

19. Slide 19: Key Activities – Next Months

    Key Activities – Next 12 Months For personal use only  Larger investment in orchard programs  Increases to the base fertilizer and foliar program inputs – to further promote tree health, growth & cropping potential  Staff training and up skilling  Build on staff development & training with in th

20. Slide 20: Operations

    For personal use only Operations Bruce van Twest General Manager Operations 20 20

21. Slide 21: Key Activities – Last Months

    Key Activities – Last 12 Months For personal use only  Almond Pre-cleaner and Crop Dryer  Enables plant to run efficiently – reduces season length  Drying capability provides product stability through life cycle  Project H2E  Stage 1 – savings realised from March 2015  Stage 2 – Project commen

22. Slide 22: Key Activities – Next Months

    Key Activities – Next 12 Months For personal use only  Almond Pre-cleaner and Crop Dryer  Trial green harvest stock  Set-up fine tuning to raise in-shell percentages  Transfer from diesel to steam powered - co-gen  Project H2E  Stage 2 – Installation and commissioning of biomass boiler + turbi

23. Slide 23: Select Harvests Video

    Select Harvests Video For personal use only 2015 Stock Pad Almond Pre-Cleaner and Crop Dryer Addition Click Hyperlink to start Video ..\..\..\Select - Videos + Photos\Select Harvest Carina West Hi Res - Final.mp4 23 23

24. Slide 24: Trading & Industrial

    For personal use only Trading & Industrial Laurence Van Driel General Manager Trading & Industrial 24 24

25. Slide 25: Our Future & Market Outlook

    Our Future & Market Outlook For personal use only  Demand:  Demand remains strong, however current prices net of currency can take up to six months to be reflected in the market. We are seeing evidence of the higher prices within the shipment numbers from California (currently 13% below that of th

26. Slide 26: Industrial & Trading

    Industrial & Trading For personal use only  Demand:  Demand remains strong, again impact of current prices yet to be fully reflected in the market.  Working Capital changes on buyers is causing changes to ordering patterns.  Competitive nuts have had similar price increases over the last 12 mont

27. Slide 27: Consumer Brands & Marketing

    For personal use only Consumer Brands & Marketing Mark Eva General Manager Sales & Marketing - Consumer Products 27 27

28. Slide 28: Key Activities & Outcomes – Last Months

    Key Activities & Outcomes – Last 12 Months For personal use only  Brands development  Increased Lucky brand share of Baking and Cooking nut Category from 36.2% to 39.0% MAT  Proprietary brands $ growth in Supermarkets of +11% YTD January  New product development  Continued investment in improve

29. Slide 29: Key Activities – Next Months

    Key Activities – Next 12 Months For personal use only  Brands development  Lucky brand into new categories and development in current categories  Implementation of significant rationalisation and redevelopment of our Health Foods strategy portfolio  Reduced complexity and duplication across port

30. Slide 30: Recent New Product Development

    Recent New Product Development For personal use only 30 30

31. Slide 31: Overview

    For personal use only Overview Paul Thompson Managing Director 31 31

32. Slide 32: 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 background material/data regarding the global almond industry can be fo

33. Slide 33: Appendix

    For personal use only Appendix 33 33

34. Slide 34: Strategic Objectives & Activities

    Strategic Objectives & Activities For personal use only FY13 INITIATIVES FY14 INITIATIVES FY15 INITIATIVES 1. CONTROL CRITICAL MASS Secure the critical mass of nuts • Acquired 1,286 acres almond orchard • Acquired 680 acres planted orchard • Acquired 2,481 acres planted orchard OF ALMONDS needed to

35. Slide 35: 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

36. Slide 36: Site Information

    Site Information For personal use only Site Information • The site occupies 100 hectares of land • Commissioned in 2008 at a cost of $40 million • Hulling and Shelling capacity is 30,000MT (9 months) • 36 hectares of stock pad capacity (limestone for product storage) • Climate controlled warehouse •

37. Slide 37: Almond Pre-Cleaner & Crop Dryer

    Almond Pre-Cleaner & Crop Dryer For personal use only  Background  In 2014, Carina West Processing Plant received 56% of field product with a hull moisture level higher than the desired 15% moisture  This impacted quality, efficiency and cost  Solution  Install Almond Pre-Cleaner and Crop Dryer

38. Slide 38: Project H2E – Hull to Energy

    Project H2E – Hull to Energy For personal use only “Abates 23,645 tonnes of greenhouse gas emissions equivalent to removing 8,210 cars off the road” “Provides enough energy to power 2984 homes” Stage 1  Bundle Carina West Processing + Carina Dam 1 + Carina Dam 2 by laying connecting cable into one

39. Slide 39: Commodity Price Trend 2008-2015

    For personal use only Price Per KG CFR $10.00 $15.00 $20.00 $25.00 $30.00 $35.00 $40.00 $45.00 $50.00 $0.00 $5.00 Feb-08 Apr-08 Jun-08 Aug-08 Oct-08 Dec-08 Feb-09 Apr-09 Jun-09 Aug-09 Oct-09 Dec-09 Feb-10 California Walnuts LH&P Apr-10 Chinese Pinenut 600 Count Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr

40. Slide 40: Global Demand – Diverse. High Growth

    Global Demand – Diverse. High Growth For personal use only Almonds have held the No.1 position in global tree nut innovations since 2006 (35% market share 2013). Long term US per capita consumption of almond outpaces all other tree nuts (376% growth since 1980) For the first time in 2013, Almonds be

41. Slide 41: Global Supply - US Almond Production & Drought

    Global Supply - US Almond Production & Drought For personal use only Orange States = Severe Drought Red States = Extreme Drought Dark Brown States – Exceptional Drought SHV 1H14 2014 – 10% Exceptional Drought, 67% Extreme Drought, 94% Severe Drought SHV 1H15 2015 – 40% Exceptional Drought, 67% Extre

42. Slide 42: US (California) Update

    US (California) Update For personal use only  US Crop Update (2013/14) – harvested – 300 million pounds smaller than first anticipated  Market estimate of USA 2013/14 Almond crop - now 1.85 billion pounds (Ref: CAB Position Report – 11 Mar 2015)  Down 250 million pounds on original NASS Objective

43. Slide 43: Select Harvests - Financial History

    Select Harvests - Financial History For personal use only SHV Historical Summary Units 2006 2007 2008 2009 2010 2011 2012 2013 2014 Total Sales (A$M) 217.9 229.5 224.7 248.6 238.4 248.3 251.3 191.1 188.3 EBIT (A$M) 38.4 40.5 27.1 26.8 26.0 22.6 19.6 37.7 41.8 EBIT Margin (EBIT/Sales - %) (%) 17.6% 1

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