Slide 1: Scales Corporation Limited 2017 Annual Shareholders' Meeting
SCALES CORPORATION LIMITED GROWING YOUR DIVERSIFIED AGRIBUSINESS 2017 Annual Shareholders’ Meeting 14 June 2017
Slide 2: Mr Apple – Consumer Video
MR APPLE —- CONSUMER VIDEO
Slide 3: Agenda
AGENDA • Welcome • Chairman’s review • Managing Director’s review • Ordinary business and resolutions Scales – 2017 Annual Shareholders’ Meeting June 2017 3
Slide 4: Chairman's Review
CHAIRMAN’S REVIEW Delivering results and meeting milestones. • Welcomed China Resources and Mr Weiyong Wang. • Generated another record financial performance. • Increased shareholding in Fern Ridge Fresh to 73%. • Completed the acquisition of Longview. • Entered the S&P NZX50 Index. • Produced our i
Slide 5: Managing Director's Review
MANAGING DIRECTOR’S REVIEW 1. Year in Review 2. Scales’ People 3. Strategy Update 4. Looking Ahead and Investor Returns Scales – 2017 Annual Shareholders’ Meeting June 2017 5
Slide 6: Jon Mayson - Retirement
JON MAYSON - RETIREMENT • 8th Chairman of Scales. • Commenced as Director of Polarcold in 2012. • Became Director and Chairman of Scales later that year. • He has overseen the Group during its transformative years: Underlying EBITDA increased from $27.4m in 2012 to $67.9m in 2016. IPO in 2014.
Slide 7: Year in Review
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Slide 8: Divisional Highlights
DIVISIONAL HIGHLIGHTS Determination and persistence throughout the Group 1 Meateor - making petfood for the world’s best companies. Approximately 23,000 MT sold in 2016, 14% above 2015. Polarcold and Whakatu Coldstores – storing produce for 2 world class companies such as Kraft Heinz, Fonterra, McCa
Slide 9: Divisional Highlights
DIVISIONAL HIGHLIGHTS Promoting innovation and efficiency Fern Ridge Fresh – increasing our marketing influence for 5 NZ apples, trading approximately 700,000 TCEs of apples p.a. including Honey Crisp and Koru into the USA market. Profruit – a special partnership, operating 24/7 and selling 6 95% of
Slide 10: Divisional Highlights Cont – To China and Beyond
DIVISIONAL HIGHLIGHTS CONT To China and Beyond The story so far: • 2004 – first apple shipped to Hong Kong traders. • 2012 – first Mr Apple container shipped to China wholesale. • 2013 – first direct retail shipment of Mr Apple. • 2014 – first direct online customer shipment of Mr Apple. • 2015 – PC
Slide 11: Scales by the Numbers
SCALES BY THE NUMBERS UNDERLYING EBITDA > half a billion 5.7m $67.9m apples picked from Mr Apple’s orchards litres of juice concentrate sold by Profruit 11% above 2015 We used 6.2m L 22,971MT sold by petfood 24,713 of rainwater collected from our TEUs organised for Auckland coldstore, reducing our i
Slide 12: 5 Year Performance Trend
5 YEAR PERFORMANCE TREND Our 2016 result maintains our steady progression in Group profitability • Underlying EBITDA has increased by 147% in the past 4 years. • We are continuing to invest in growth both organically and by acquisition. Underlying EBITDA* Underlying NPAT* $67.9m $38.6m CAGR 25% $61.
Slide 13: Summary Financial Performance
SUMMARY FINANCIAL PERFORMANCE Significantly ahead of 2015 results • Revenue $373.9m, up 24% on Income Statement 2015. 2015 2016 (Restated) • Underlying EBITDA $67.9m, up 11% $ Millions Actual Growth % Actual on 2015. Revenue 373.9 24% 301.4 • Underlying NPAT $38.6m, up 11% Cost of Sales (258.0) (194
Slide 14: Divisional EBITDA Trend
DIVISIONAL EBITDA TREND Strong growth in Horticulture and Food Ingredients Storage & Logistics delivering a consistent performance Trends in Underlying Divisional EBITDA ($m) Horticulture Storage & Logistics Food Ingredients CAGR 4% $9.2m $45.3m $16.3m $16.2m $40.0m CAGR 14% $14.0m $13.9m $7.6m CAGR
Slide 15: Strong Balance Sheet
STRONG BALANCE SHEET Excellent financial position • Increased capital employed is mostly influenced by acquisition activity or the application of new accounting standards resulting in non-cash balance sheet adjustments. • Strong financial position enables us to cash and debt finance strategic bolt-o
Slide 16: Scales' People
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Slide 17: People
PEOPLE Committed to being an employer of choice • Our people – stable, experienced and hard-working. • We want to develop our people’s skills and potential: Apprenticeships. Hua initiative. WINZ partnership. SEED programme. Training programmes: — Professional development. — National Certif
Slide 18: Health and Safety
HEALTH AND SAFETY Our #1 priority • Uncompromising in our commitment to the health and safety of our workers. • Responsibility of every Director, manager and team member. • Significant part of every Board meeting. • Every employee should go home at the end of each day healthy and safe. • Extensive t
Slide 19: Strategy Update
3 STRATEGY UPDATE
Slide 20: Our Vision and Long-Term Goal
OUR VISION AND LONG-TERM GOAL Scales’ Vision: To be the foremost investor in, and grower of, New Zealand agribusinesses by leveraging our unique insights, experience and access to collaborative synergies. • Seeking to extend agribusiness reach through disciplined and patient investment. • Believe mo
Slide 21: Update on Strategic Objectives
UPDATE ON STRATEGIC OBJECTIVES Meeting or exceeding our objectives • Our objectives include: Division Target Status Group Best in class sustainability reporting developed. Sustainability report developed and included in our Annual Report. Prudently utilise leverage to support equity returns
Slide 22: Sustainability
SUSTAINABILITY We produced our inaugural Sustainability Report • Understand we have a responsibility to all stakeholders to have a sustainable business. • Undertook a sustainability materiality review. • Grouped the topics under three headings: Our people. Our marketplace. Our environment. • S
Slide 23: Looking Ahead and Investor Returns
4 LOOKING AHEAD AND INVESTOR RETURNS
Slide 24: Trading Update
TRADING UPDATE The outlook for Scales remains positive • Horticulture: Mr Apple Gross Harvest & Export Packout Gross pick in line with past two years. 5.0 81% 85% ~60% of fruit packed to date. Packout expected 4.4 4.4 4.5 4.4 80% to return to long term averages. 73% 75% 73% 3.9 75% 4.0 71% Sli
Slide 25: Dividends
DIVIDENDS • Total of $0.18 per share in cash dividends declared or paid in respect of 2016: Increase from $0.13 ‘ordinary’ dividend per share and $0.17 total dividend per share in 2015. Represents a gross dividend yield of 8.3% on the average daily share price in 2016 (2015: 12.9%). Correspond
Slide 26: Ordinary Business and Resolutions
ORDINARY BUSINESS AND RESOLUTIONS
Slide 27: Resolution 1: Auditor's Remuneration
RESOLUTION 1 That the Board is authorised to fix the auditor’s remuneration for the coming year. Scales – 2017 Annual Shareholders’ Meeting June 2017 27
Slide 28: Resolution 2: Re-election of Nick Harris
RESOLUTION 2 Having retired by rotation (as determined by lot), that Nick Harris be re-elected as a Director. Scales – 2017 Annual Shareholders’ Meeting June 2017 28
Slide 29: Resolution 3: Election of Weiyong Wang
RESOLUTION 3 Having been appointed during the year by the Board and holding office only until the Annual Meeting, that Weiyong Wang be elected as a Director. Scales – 2017 Annual Shareholders’ Meeting June 2017 29
Slide 30: Resolution 4: Directors' Remuneration Pool
RESOLUTION 4 That the maximum total pool of Directors’ remuneration payable by Scales to Directors (in their capacity as Directors) be increased by $60,000 per annum from $440,000 per annum to $500,000 per annum. Scales – 2017 Annual Shareholders’ Meeting June 2017 30
Slide 31: Voting & Questions
VOTING & QUESTIONS
Slide 32: Disclaimer
DISCLAIMER Please do not read this presentation in isolation This presentation supplements our full year results announcement dated 28 February 2017 and Annual Report dated 29 March 2017. It should be read subject to and in conjunction with the additional information in that release and other materi