Select Harvests Limited · ASX:SHV
Select Harvests — 13th PAC Partners Agribusiness & Food Conference 2016
26 slides from Select Harvests's conference presentation, Apr 18, 2016
Slide 1: Select Harvests Limited – PAC Partners Agribusiness & Food Conference
For personal use only Select Harvests Limited (“SHV”) Paul Thompson - Managing Director 13th PAC Partners Agribusiness & Food “Making Your Own Luck” Conference 19th April 2016
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: Select Harvests Business Overview
Select Harvests Business Overview For personal use only Almond Division 14,303 acres of Australian almond orchards – Victoria, South Australia & New South Wales 80% in cash generative mature phase – very low capex required Improve orchard productivity through high performance farming program
Slide 4: Macro Trends Driving Strategy
Macro Trends Driving Strategy For personal use only Demand Drivers Supply Drivers Health Land Availability Weight Loss Infrastructure Heart Disease Capital Lactose Intolerance Environment Gluten Free Climate Coeliacs Water availability Diabetes Sustainability Wealth C
Slide 5: Strategy - Planning for excellence and growth
Strategy - Planning for excellence and growth For personal use only 1. CONTROL CRITICAL MASS Secure the critical mass of nuts needed to maximize OF ALMONDS profitability and leverage the global almond opportunity. 2. IMPROVE YIELD & CROP Improve yield and overall crop value by perfecting on-farm VAL
Slide 6: Strategy Execution
Strategy Execution For personal use only Business Growth Orchard Growth Orchard Productivity Growing Brands & New Product Portfolio New Geographies Risk Mitigation Almond Crop Dryer Water Policy Bee Policy Strong Balance Sheet Cost Out Project H2E – Biomass Electricity Cogene
Slide 7: Orchard Geographic Diversity
Orchard Geographic Diversity For personal use only Select Harvests has a geographically diverse portfolio Australian Almond orchards - with global scale 7 7
Slide 8: Orchard Age Profile
Orchard Age Profile For personal use only Significant growth & improvement occurred in SHV orchard portfolio in recent years - acquisition, replants, greenfields 8 8
Slide 9: Almond Volume Growth
Almond Volume Growth For personal use only +46% +39 +22% +3% 80% of current planted acres are cash generative By 2024, almond volumes will increase by 46% 2018: +3%, 2020: +22%, 2022: +39%, 2024: +46% (Pink & Blue Sections only – basis capital already sunk) 9 9
Slide 10: Project H2E – Hull to Energy
Project H2E – Hull to Energy For personal use only Project Overview: Biomass boiler and steam turbine, fuelled by almond hull and shell converting it to heat and power. Abating 24000 tonnes* of greenhouse gas. • Internal estimate Drops energy cost by 20%, enhancing Carina West’s position as a global
Slide 11: Project Parboil – Almond Value-Add
Project Parboil – Almond Value-Add For personal use only Project Overview: Low cost Value Added Almond Processing & Packing Facility at Carina West Tripling value-added capacity to meet increasing demand from Asia Producing allergen free (i.e. peanut free) almond products 11 11
Slide 12: Increasing Value-Added & Export Businesses
Increasing Value-Added & Export Businesses For personal use only Moving from Grower & Commodity Bagger to Value-Adding 12 12
Slide 13: Market Outlook
Market Outlook For personal use only Category Overview: Demand remains strong, current prices expected to generate growth Consumers continue to see the benefits of all super foods with new product development remaining buoyant Buying patterns had changed due to instability in pricing, little
Slide 14: 2016 SHV Crop Update
2016 SHV Crop Update For personal use only Harvest Progress Update – Ahead of previous years Complete Volume Update – No change to 13,700 tonne estimate Not all stock has been delivered to processing centre Processing Update – On Plan: 20% of estimated crop has been processed Quality is
Slide 15: 2016 Business Update
2016 Business Update For personal use only Almond Division - Experiencing Pricing pressure Good harvest & price appears to be stabilising Orchard cost forecast flat year on year Food Division - Momentum Continues Our value-added strategy is gaining traction Export sales up >20% YOY Luc
Slide 16: SHV makes its Own Luck everyday!
SHV makes its Own Luck everyday! For personal use only Lucky Market Share: 43.6% vs 39.0% YOY (MAT) – A NEW RECORD 16 16
Slide 17: SHV 2016/7 Business Objectives
SHV 2016/7 Business Objectives For personal use only 1. Zero Harm OH&S strategy 2. Improve average mature tree yield 3. Acquire orchards at the right price 4. Grow and strengthen Food Business 5. Implement Greenfield program 6. Implement Biomass/Cogen plant 7. Implement Parboil 8. Implement 1Select
Slide 18: 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
Slide 19: Select Harvests - Financial History
Select Harvests - Financial History For personal use only Source: Company Data 19 19
Slide 20: Select Harvests – Orchard Summary
Select Harvests – Orchard Summary For personal use only Select Harvests Planted Under development Total Almond orchard portfolio Acres Hectares Acres Hectares Acres Hectares Central region Company Owned 4,169 1,688 - - 4,169 1,688 Leased 1,481 600 1,400 567 2,881 1,166 Total 5,650 2,287 1,400 567 7,
Slide 21: Almond Pricing over a year crop period (AUD)
Almond Pricing over a 10 year crop period (AUD) For personal use only Almond Price Nonpareil SUP 23/25 (AUD/kg) (AUD/kg) Historical Rolling Average AUD/kg 5 Year Rolling Average AUD/kg Rollng Average USD vs AUD Linear ((AUD/kg)) $14.00 $9.00 $8.00 $12.00 $7.00 $10.00 $6.00 $8.00 $5.00 $6.00 $4.00 $3
Slide 22: Almonds competitively priced against other tree nuts
Almonds competitively priced against other tree nuts For personal use only Tree Nut Spot Pricing March 2010 vs March 2015 vs March 2016 (USD/lb) Averaged March 2016 Averaged March 2015 Averaged March 2010 $2.50 Almond $4.55 $2.42 $3.65 Hazelnut $6.80 $2.80 $4.75 Roasted & Salted $5.35 Pistachio $3.9
Slide 23: US (California) Update
US (California) Update For personal use only US Crop Update (2015/16) – mixed start to season Industry experienced good chill hours and bloom conditions Largest US grower removed 10,000 acres (25% of almond portfolio) New plantings indicate growers still transitioning towards more secure wat
Slide 24: Global Supply - US Almond Production & Drought
Global Supply - US Almond Production & Drought For personal use only 14% - North Counties % of US Almond Prod’n Orange States = Severe Drought 86% - South Counties % of US Almond Prod’n Red States = Extreme Drought Dark Brown States – Exceptional Drought Drought Situation is consistent with 2015 – D
Slide 25: Global Supply - US Almond Production & Drought
Global Supply - US Almond Production & Drought For personal use only Snow Pack is below average – it will impact Surface Water situation 25 25
Slide 26: Useful Links
Useful Links For personal use only Derco Foods http://www.dercofoods.com/en/reports RPAC Almonds http://www.rpacalmonds.com/marketnews/ Blue Diamond Ingredients http://www.bdingredients.com/category/almond-market-analysis/ Almond Investors http://www.almondinvestors.com.au/index.php/almond-projects/
Select Harvests — 13th PAC Partners Agribusiness & Food Conference 2016 on 6ix