Sanford Limited · NZX:SAN
Sanford — HY24 Earnings Presentation
24 slides from Sanford's earnings presentation, May 2024
Slide 1: Results Briefing
Results Briefing For the six months ended 31 March 2024
Slide 2: Disclaimer
Disclaimer Important Notice This presentation contains not only a review of operations and information about Sanford Limited (the Company), but also contains some forward-looking statements about the Company and the environment in which it operates. This disclaimer applies to this presentation and a
Slide 3: Half Year (HY24) Results Summary
Half Year (HY24) Results Summary
Slide 4: HY24 Summary
HY24 Summary NPAT of $16.2m, up 46% on PCP. • Salmon division continues to perform strongly. • Improvement in mussel profitability. • Wildcatch steady – positive impact from inshore restructure. Adjusted EBIT at $38.5m up 45% on the HY23. • Highest adjusted EBIT in recent history. • Significantly re
Slide 5: HY24 Key Financials
HY24 Key Financials An improved result for HY24. Strong salmon performance, improved mussel result and a Sanford-half year results positive return from the inshore business. NZ$ Million HY15 HY16 HY17 HY18 HY19 HY20 HY21 HY22 HY23 HY24 • Revenue slightly down on pcp (exit of inshore Revenue 226.0 21
Slide 6: Improved Profitability driven by Salmon & Mussels
Improved Profitability driven by Salmon & Mussels Key drivers of Adjusted EBIT change vs HY23 NZD $M 6
Slide 7: Improved Profitability driven by Salmon & Mussels
Improved Profitability driven by Salmon & Mussels Key drivers of Adjusted EBIT change vs HY23 Group NZD $M Australia Costs Wildcatch drivers +$1.5m Salmon drivers +$5.6m Mussel drivers +$7.1m ($0.2m) ($2.1m) 7
Slide 8: Gross Margin Positive Movement
Gross Margin Positive Movement • Gross margin improvement reflecting positive in-market prices and channel simplification with reduced fuel prices and positive mix changes. • Reduction in sales costs also a driver of improved margins. 8
Slide 9: Seafood Inventory
Seafood Inventory Inventory Volume (PWT) Inventory Value ($m)* HY24 vs HY23 increase +12.6% HY24 vs HY23 YOY increase +27.3% * * • Increase in inventory - mainly in wildcatch. Plans in place to reduce in 2H. * Inventory value differs to financial statements as above excludes non-seafood inventory 9
Slide 10: Capital Expenditure
Capital Expenditure HY24 HY23 • 91% of the capital spend on integrity projects and Health and Safety. Integrity $20.7m $20.7m • No further costs capitalised for the Sancore IT Vessel surveys $12.7m Vessel surveys $7.4m project. Processing equipment $0.5m Processing equipment $1.3m Mussels $1.1m Muss
Slide 11: Divisional Performance
Divisional Performance Divisional Performance
Slide 12: Salmon HY24
Salmon HY24 Strong pricing and ongoing growth in Big Glory Bay driving improved revenue and profit contribution • Volume remains steady – up 1% on pcp. • Revenue increase due to strong in-market pricing, favourable mix and further growth in Big Glory Bay. • Profit contribution up 32% on pcp. 12
Slide 13: Salmon HY24
Salmon HY24 Pricing uplift driven by favourable mix, BGB growth and strong pricing. Inventory levels well managed. • Low inventory levels. Predominantly a fresh business with low stock holdings. • Q2 lift in prices due to a change in mix. 13
Slide 14: Salmon HY24
Salmon HY24 • Year on year profit growth. • Prices up across most categories, Big Glory Bay volume increase. • Mix changes away from portions, maximising returns. • Reduced and stable mortalities; positive impact of mitigation measures on farms. • Reduction of freight costs and more favourable forei
Slide 15: Wildcatch HY24
Wildcatch HY24 Strong performance post inshore divestment, strong Scampi pricing. • Reduced volumes and revenue mainly as a result from the exit from the inshore business. • Profit contribution up 6% on HY23 from strong pricing on key species and improved inshore profitability. 15
Slide 16: Wildcatch HY24
Wildcatch HY24 Pricing improvement across most key species. Inventory build with plans to reduce. • Increase in inventory from past four quarters. • Increase mainly in Hoki, orange roughy and squid – Demand still positive and plans to sell through and reduce holdings by end of financial year. 16
Slide 17: Wildcatch HY24
Wildcatch HY24 • Inshore divestment completed in October 23 - reduction in sales volume, but increase in profitability. • Good demand for scampi with improved prices, but total volume will be reduced due to failure to secure crown ACE for the year. • Fishmeal sales and price increases. • Delayed ATO
Slide 18: Mussels HY24
Mussels HY24 Profit Contribution recovery driven by stronger pricing and operational efficiencies. • Volume in line with pcp. • Strong in-market prices and positive mix change towards half shell mussels away from meat and whole mussels. • Contribution improvement reflecting better pricing, mix and i
Slide 19: Mussels HY24
Mussels HY24 Pricing continues on strong growth trajectory. Inventory levels remain normalised. • Inventory at consistent levels in last 3 quarters, reduction by 21% from pcp. • Half shell demand remains high. 19
Slide 20: Mussels HY24
Mussels HY24 • Mussel stronger performance helped by operational improvements and more favourable in-market conditions. Labour and productivity challenges experienced in the prior year have been mostly resolved. • Pausing of operations at the Coromandel NIML processing plant to third party tolling d
Slide 21: Summary
Summary • An improved year with increased profitability and a positive outlook for the full financial year. • Gross margin improvements reflecting good pricing, channel simplification and favourable in-market conditions. • Capital spend for the year is mostly integrity related and has to be managed
Slide 22: Directors and Executives
Directors and Executives Sir Robert McLeod John Strowger Chairman, Independent Non-Executive Director Non-Executive Director Appointed to the Board in 2016, appointed Deputy Appointed to the Board in 2023 Chair 2018, appointed Chairman in 2019 Tom McClurg Craig Ellison Independent Non-Executive Dire
Slide 23: Questions?
LOOKING FOWARD Questions ?
Slide 24: HY24 GAAP to Non-GAAP Reconciliation
HY24 GAAP TO NON-GAAP RECONCILIATION 24