Select Harvests Limited · ASX:SHV
Select Harvests — Shareholder Meeting (November 2016)
41 slides from Select Harvests's shareholder meeting presentation, Nov 25, 2016
Slide 1: 2016 Annual General Meeting – Growing Together
For personal use only Select Harvests Limited (“SHV”) 2016 Annual General Meeting Growing Together 25 November 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: Michael Iwaniw, Chairman
For personal use only Michael Iwaniw Chairman 3
Slide 4: Select Harvests Board
Select Harvests Board For personal use only Michael Iwaniw, Chairman, Appointed Chairman November 2011, standing for re-election Fred Grimwade, Non-Executive Director, Appointed July 2010 Paul Riordan, Non-Executive Director, Appointed October 2012 Ross Herron, Non-Executive Director, Appoin
Slide 5: Agenda
Agenda For personal use only • 2016 Business Highlights • 5 Year Business Performance • Strategy • Environment Sustainability and Governance • Business Environment & Performance • Almond Division • Food Division • Major Projects • Key Take-Outs 5
Slide 6: 2016 Business Highlights
2016 Business Highlights For personal use only ■ Net Profit after Tax (NPAT) – 2nd highest ever ■ Reported NPAT $33.8m (FY15 $56.8m) ■ Underlying NPAT $27.9m (FY15 $59.4m) ■ Operating cash flow $92.9m (FY15 $30.4m) ■ Underlying EBIT $41.3m (FY15 EBIT $89.6m) ■ Food Division EBIT $10.3m (FY15 $6.8m)
Slide 7: Year Business Performance
5 Year Business Performance For personal use only Underlying NPAT (A$ million) Planted/Bearing Almond Orchards (acres)* 59.4 Planted Acres Bearing Acres 16,521 13,311 13,824 11,943 12,319 10,022 6,689 8,804 8,804 9,295 9,443 27.9 Ha 5,597 4,987 22.9 21.6 4,057 3,763 5,389 Ha 4,835 Ha 3,564 3,564 Ha
Slide 8: Strategy
Strategy 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 VALUE and farm to factory practices. 3.
Slide 9: Environment Sustainability & Governance
Environment Sustainability & Governance For personal use only ■ Environment & Sustainability ■ Zero environmental breaches ■ Water - Conserve, recycle, save. Improve efficiency of water distribution ■ Energy - Project H2E reduces carbon footprint by 27%. Commissioned first off-grid solar power farm
Slide 10: Acknowledgement – Ross Herron
Acknowledgement – Ross Herron For personal use only Significant contribution to the company across his 11 years of service 10
Slide 11: Paul Thompson, Managing Director
For personal use only Paul Thompson Managing Director 11
Slide 12: 2016 Business Environment
2016 Business Environment For personal use only ■ Underlying NPAT $27.9 million - 2nd highest ever ■ Cash generation - generated record operating cash flow ■ Strong balance sheet underpins growth - balance sheet secure ■ Business environment - Almond price & currency improving ■ Growth on track - Al
Slide 13: Year Business Performance
5 Year Business Performance For personal use only Food Division - Export Sales (A$ million) Growing Cost per Kg (A$/Kg) 11,943 12,319 18.9 9,295 9,443 15.4 8,804 13.5 8.8 5.4 FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16 Harvest Volume (MT) SHV Average Almond Price (A$/kg) 14,500 14,200 11.45 12
Slide 14: Almond Division
Almond Division For personal use only Horticulture ■ Volume: FY16 crop volume 14,200 tonnes (FY15 14,500 tonnes) ■ Night harvest and favourable conditions resulted in faster harvest ■ Tree health - continues to improve as nutrient program takes effect ■ Greenfield plant out - 844 HA (2,084 acres wit
Slide 15: Significant Volume Growth
Significant Volume Growth For personal use only Today 74% of orchards are cash generative 15
Slide 16: Global Market Update
Global Market Update For personal use only Demand China and Indian demand strong. US demand is starting to improve with current prices stimulating demand. 2016 US crop is being shipped at record rates October 2016 shipments - 236 million pounds - highest ever (prev. highest Oct 2013) October
Slide 17: 2017 SHV Crop Update
2017 SHV Crop Update For personal use only Crop Sufficient chill hours between seasons Good bloom Isolated storms and hail in SA - some nut loss and equipment damage Weather outlook - average rainfall, slightly higher temperature SHV 2017 Crop estimate between 15,500 & 16,000 tonnes Market
Slide 18: Food Division
Food Division For personal use only Revenue ■ Revenue of A$161.8 million was up 16.6% (FY15 A$138.8 million) ■ Industrial sales - up 17% ■ Branded Consumer sales - up 10% ■ Export - Continued to grow in both divisions ■ Record Lucky Cooking Market share - July 2016 MAT 42.3 % vs 40.1% last year MAT
Slide 19: Major Projects
Major Projects For personal use only Greenfield Development ■ On plan to budget ■ Funding model delivering – 844HA (2,084 acres) planted out ■ Greenfield plantings displaying excellent tree health Project H2E - Biomass Electricity Cogeneration Facility ■ Delay to the installation and commissioning o
Slide 20: Key Take Outs
Key Take Outs For personal use only ■ Almond strategy is in place to fund and grow volume by 63% in 2025 ■ Actively looking to further invest in mature assets ■ Orchard health is excellent and 2017 crop estimate is 15,500- 16,000 MT ■ Cost competitive producer position is dependent on our investment
Slide 21: 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 22: Consideration of the Financial Statements & Reports
For personal use only Annual General Meeting 25 November 2016 Consideration of The Financial Statements & Reports 22
Slide 23: Resolution #1: Remuneration Report
For personal use only Resolution #1: Remuneration Report 23
Slide 24: Resolution #1: Remuneration Report
For personal use only Resolution #1: Remuneration Report For: 28,788,063 Against: 454,029 Open-Usable: 846,083 24
Slide 25: Resolution #2(a): Election of Michael Iwaniw
For personal use only Resolution #2(a): Election of Michael Iwaniw 25
Slide 26: Resolution #2(a): Election of Michael Iwaniw
For personal use only Resolution #2(a): Election of Michael Iwaniw For: 29,248,378 Against: 79,070 Open-Usable: 863,742 26
Slide 27: Resolution #2(b): Election of Nicki Anderson
For personal use only Resolution #2(b): Election of Nicki Anderson 27
Slide 28: Resolution #2(b): Election of Nicki Anderson
For personal use only Resolution #2(b): Election of Nicki Anderson For: 29,195,868 Against: 130,026 Open-Usable: 871,307 28
Slide 29: Discussion
For personal use only Discussion 29
Slide 30: 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 31: Select Harvests - Financial History
Select Harvests - Financial History For personal use only 2006 2007 2008 2009 2010 2011 2012 2013 2014* 2015 2016 SHV Historical Summary Units Total Sales (A$M) 217.9 229.5 224.7 248.6 238.4 248.3 251.3 191.1 188.1 223.5 285.9 EBIT (A$M) 38.4 40.5 27.1 26.8 26.0 15.4 19.6 37.7 31.3 89.6 41.3 EBIT Ma
Slide 32: Understanding FY16 Result
Understanding FY16 Result For personal use only Reported FY16 Net Profit after Tax (NPAT) $33.8m Impact of non-recurring items $5.9m ■ Gains on Asset Sales during the Period* Underlying FY16 Net Profit after Tax (NPAT) $27.9m * Gains on Asset Sales during the Period ̶ 3 properties sold to First Stat
Slide 33: Income Statement
Income Statement For personal use only Financial Result FY15 FY16 ■ FY16 Underlying EBIT $41.3m (FY15 $89.6m) ($m) ($m) ■ Almond Division Underlying EBIT $36.1m (FY15 $87.5m) Reported Result EBIT - Reported 85.9 49.8 ̶ Strong performance in challenging market Interest (5.3) (5.5) • 2016 crop key dri
Slide 34: Balance Sheet
Balance Sheet For personal use only Year Ending Balance Sheet Jun-15 Jun-16 ($m) ($m) Current Assets excl. Cash 207.5 154.1 Cash 0.3 1.4 ■ Net Debt $67.3m (FY15 $115.6m) Non-Current Assets 280.1 294.3 ̶ includes finance lease commitments of $41.8m Total Assets 487.9 449.8 ■ Gearing (Net debt/equity)
Slide 35: Cash Flow
Cash Flow For personal use only FY15 FY16 ■ Decreased working capital due to 2015 crop sales Cash Flow ($m) ($m) ■ FY16 Investing cash flows driven by: EBITDA 96.4 62.4 ̶ Orchard acquisitions $5.3m (FY15 $54.6m) Change in Working Capital (61.0) 35.4 ̶ Investment in cogen, new orchards in NSW, additi
Slide 36: 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 37: Select Harvests – Orchard Profile
Select Harvests – Orchard Profile For personal use only Select Harvests Planted Under Development Total Planted Almond orchard portfolio (as at 30 June 2016) (as at 30 June 2016) (as at 26 August 2016) Acres Hectares Acres Hectares Acres Hectares Central region Company Owned 3,852 1,559 310 125 4,16
Slide 38: Select Harvests – Horticultural Costs
Select Harvests – Horticultural Costs For personal use only 38
Slide 39: Select Harvests – Orchard Age Profile
Select Harvests – Orchard Age Profile For personal use only 74% of current planted acres are cash generative Significant growth & improvement occurred in SHV orchard portfolio in recent years - acquisition, replants, greenfields 39
Slide 40: Almond Market Outlook – US Shipments 2015/16
Almond Market Outlook – US Shipments 2015/16 For personal use only US Export Shipments US Domestic Shipments Total US Almond Shipments 2014/15 2015/16 Growth 2014/15 2015/16 Growth 2014/15 2015/16 Growth (million lbs) (million lbs) (%) (million lbs) (million lbs) (%) (million lbs) (million lbs) (%)
Slide 41: 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
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