Slide 1: Positioned for Growth: Capital Raising and FY10 Results Presentation
For personal use only SELECT HARVESTS Positioned for Growth Capital Raising and FY10 Results Presentation 23 August 2010 NOT FOR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS
Slide 2: Important Information
Important Information For personal use only This presentation has been prepared by Select Harvests Limited (ACN 000 721 380) ("Select Harvests"). This presentation contains information about Select Harvests and its subsidiaries and is dated 23 August 2010. The information in this presentation does n
Slide 3: Important Information
Important Information For personal use only United States This presentation does not constitute an offer, invitation or recommendation to subscribe for or purchase any security and neither this presentation nor anything contained in it shall form the basis of any contract or commitment. In particula
Slide 4: Agenda
Agenda For personal use only Executive summary FY10 results Positioned for growth Capital management and equity raising Conclusion Appendix - Risk factors 4 NOT FOR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS
Slide 5: Overview
Overview For personal use only Solid performance, NPAT of $17.3 million (+3.2%) EPS 43.3 cents per share (+1.6%) FINANCIAL HIGHLIGHTS Cash flow from operating activities $25.5 million (+12.9%) Final dividend of 11 cents representing fully franked full year dividend of 21 cents Net debt $45
Slide 6: Outlook
Outlook For personal use only Strong almond price fundamentals Well positioned to benefit from global demand/supply dynamic Significant increase in company orchards – established orchards almost doubled (3,600 acres to 8,600 acres) Improved maturity profile across managed and owned orchards
Slide 7: Improved capital structure to fund future growth
Improved capital structure to fund future growth For personal use only Equity raising to raise approximately $48 million via a fully underwritten, accelerated, renounceable, pro rata offer EQUITY RAISING Offer price of $3.00 per share Ex-dividend. The dividend re-investment plan has been tempo
Slide 8: Agenda
Agenda For personal use only Executive summary FY10 results Positioned for growth Capital management and equity raising Conclusion Appendix - Risk factors 8 NOT FOR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS
Slide 9: FY10 financial highlights
FY10 financial highlights For personal use only Revenue: $238.4 million (FY09: $248.6 million) NPAT: $17.3 million (FY09: $16.7 million) EPS: 43.3 cents (FY09: 42.6 cents) Strong cash generation and cash conversion Final dividend declared of 11 cents per share 9 NOT FOR DISTRIBUTION IN THE UNITED ST
Slide 10: Solid performance in a period of transition
Solid performance in a period of transition For personal use only Income Statement Year ended Year ended ($m) % Change 30/06/10 30/06/09 Sales revenue 238.4 248.6 -4.1% EBIT Managed Orchards 17.7 22.9 Company Orchards 6.8 2.7 Almond Division 24.5 25.6 -4.3% Food Division 5.1 4.5 +14.5% Corporate (3.
Slide 11: Operating EBIT
Operating EBIT For personal use only OPERATING OPERATING EBIT EBIT ORCHARD ORCHARD DEVELOPMENT DEVELOPMENT 2009: 2009: $30.0m* $30.0m* •• Nursery Nursery 2010: 2010: $29.6m $29.6m •• Orchard Orchard Establishment Establishment COMPANY COMPANY ORCHARDS ORCHARDS EBIT EBIT 2009: 2009: $2.7m $2.7m MANAG
Slide 12: Strong balance sheet
Strong balance sheet For personal use only Balance Sheet As at As at ($m) 30/06/10 30/6/09 Current Assets excl. Cash 70.8 74.2 Cash 13.2 6.9 Non Current Assets 145.7 133.9 Total Assets 229.7 215.0 Current Liabilities (excl. Borrowings) 40.3 43.0 Borrowings 58.2 59.3 Non Current Liabilities (excl. Bo
Slide 13: Strong operating cash flow
Strong operating cash flow For personal use only Cash flow statement Year ended Year ended ($m) 30/06/10 30/06/09 EBITDA 31.0 31.6 Change in Working Capital 4.2 (1.3) Working capital focus Taxes Paid (6.5) (3.8) Strong cash conversion Net Interest (3.2) (3.8) Investment in WA orchards Cash flo
Slide 14: Almond division – Managed Orchards
Almond division – Managed Orchards For personal use only 3 year management agreement with Olam now well established, rebased to new fee structure under Olam contract Crop lower than earlier estimate and normal yield expectations due to: Legacy transition issues following transition to new owne
Slide 15: Almond division – Company Orchards
Almond division – Company Orchards For personal use only Increased Company Orchards through: Lease of 3,000 acres established orchards in Hillston, NSW Planting of 2,000 acres in WA 300 acres transitioned from managed to company orchards Improved EBIT performance 2010 crop above 2009 cro
Slide 16: Food division
Food division For personal use only Continued improvement in EBIT performance following re-alignment of business Almond pool fee income impacted by 2010 crop volume and timing of harvest Focus on growing almond sales, up 10% on last year Significant improvement in value added product EBIT, u
Slide 17: Agenda
Agenda For personal use only Executive summary FY10 results Positioned for growth Capital management and equity raising Conclusion Appendix - Risk factors 17 NOT FOR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS
Slide 18: Global demand expected to exceed supply by 2013/14
Global demand expected to exceed supply by 2013/14 For personal use only Global market worth an estimated US$4.5 billion Stable market: 9% annual average consumption growth since 2000 Restricted supply Slow down in plantings - lack of suitable growing conditions, land and water Long lead t
Slide 19: Australian almond industry
Australian almond industry For personal use only Australia is set to become the world’s no.2 global almond producer by 2015 9 Advantageous natural environment 9 Premium quality crop – 50% of Australia’s crop is the premium nonpareil variety 9 Well positioned to serve increasing demand from emerging
Slide 20: Select Harvests' almond strategy
Select Harvests’ almond strategy For personal use only Expand Company Orchards, geographic diversification: Acquire or lease established orchards across established growing COMPANY regions (e.g. Hillston) ORCHARDS $4 million acquisition at Lake Powell (subject to unit holder approval (WA, VIC,
Slide 21: Select Harvests' drivers of growth
Select Harvests’ drivers of growth For personal use only Volume growth from existing orchards reaching full maturity 43,300 acres under management, including 8,600 acres Company Orchards Expected to generate 52,000 mt at full maturity based on industry standard yield projections Expand company o
Slide 22: Volume growth from maturity profile
Volume growth from maturity profile For personal use only Australian almond industry is set to grow significantly as orchards reach maturity Over 70% planted 2004 onwards Production expected to grow at 17.5% annual growth rate (2008-2015) Australia set to surpass Spain as the number two prod
Slide 23: Expanded footprint in Victoria and NSW
Expanded footprint in Victoria and NSW For personal use only Expanded footprint in NSW via long lease agreements with Rural Funds Management 3,000 acres near Hillston, NSW 20 year lease, annual rental payment Expected to deliver first crop in 2011 3,600 acres of Company Orchards in Robinva
Slide 24: Growth in Western Australia
Growth in Western Australia For personal use only 4,300 acres plus 22,000 ML of permanent water licenses Dandaragan plateau region is in the northern wheat belt Dandaragan of WA Plateau Entry cost below replacement cost in Victoria and New South Wales Stage 1 development of 2,000 acres of gr
Slide 25: Agenda
Agenda For personal use only Executive Summary FY10 results Positioned for growth Capital management and equity raising Conclusion Appendix - Risk factors 25 NOT FOR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS
Slide 26: Capital management plan
Capital management plan For personal use only Capital management plan reviewed to develop a strong balance sheet that provides flexibility to fund growth Refinanced in February and now have $40 million of three year term debt, a further $10m short term term debt facility and $28 million seasonal
Slide 27: Offer details
Offer details For personal use only Accelerated renounceable pro-rata 2 for 5 entitlement offer to raise EQUITY RAISING approximately $48m Offer price of $3.00 16.4% discount to last close of $3.70 adjusted for final dividend of $0.11 15.9% discount to 5 day VWAP of $3.68 adjusted for final
Slide 28: Uses of proceeds
Uses of proceeds For personal use only Select Harvests is currently evaluating a number of opportunities Agreement to acquire 530 acres at Lake Powell (subject to unit holders approval to be sought at meeting on 24 August 2010 and subsequent entry into contractual documentation) These include
Slide 29: Indicative timetable
Indicative timetable For personal use only EVENT DATE rd Announcement of Equity Raising and FY10 results Monday 23 August Institutional Entitlement Offer opens Monday 23rd August th Institutional Entitlement Offer closes Wednesday 25 August th Institutional Bookbuild Wednesday 25 August th Record Da
Slide 30: Key risks
Key risks For personal use only There are a number of risks which may affect an investment in Select Harvests. Some of these risks are listed below. An expanded list of risks can be found in the appendix SPECIFIC RISKS GENERAL RISKS Sales margins & almond price Share price and volume fluctuati
Slide 31: Agenda
Agenda For personal use only Executive Summary FY10 results Positioned for growth Capital management and equity raising Conclusion Appendix - Risk Factors 31 NOT FOR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS
Slide 32: Well positioned for growth
Well positioned for growth For personal use only Leading player in Australian almond industry for over 30 years Strong track record in managing almond orchards – second largest managed area globally Proven orchard development capability Industry leading water conservation practices Modern
Slide 33: Agenda
Agenda For personal use only Executive Summary FY10 results Positioned for growth Capital management and equity raising Conclusion Appendix - Risk Factors 33 NOT FOR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS
Slide 34: Specific Risk Factors
Specific Risk Factors For personal use only Sales margins, almond price and costs Sales are impacted by the market price of products sold which are subject to market forces of supply and demand. Specifically, the sales of almonds owned by Select Harvests are subject to global pricing patterns.
Slide 35: Specific Risk Factors
Specific Risk Factors For personal use only Material contracts Select Harvests has entered into a 3 year management contract to provide almond orchard management, almond processing and marketing services to Olam Orchards Australia Pty Ltd. This represents a material component of Selects Harvests
Slide 36: Specific Risk Factors
Specific Risk Factors For personal use only Competition Select Harvests' financial performance or operating margins and the value of Select Harvests could be materially adversely affected if existing competitors increase market share or new competitors enter the market. Such competition may ha
Slide 37: General Risk Factors
General Risk Factors For personal use only Share price and volume fluctuations Securities may experience extreme price and trading volume fluctuations. Following the Offer, there may not be an active trading market in the Select Harvests shares. If a market is not sustained, it may be difficult
Slide 38: General Risk Factors
General Risk Factors For personal use only Taxation implications Future changes in Australian taxation law, including changes in interpretation or application of the law by the courts or taxation authorities in Australia, may affect taxation treatment of an investment in Select Harvests shares,