Select Harvests Limited · ASX:SHV
Select Harvests — Shareholder Meeting (February 2024)
39 slides from Select Harvests's shareholder meeting presentation, Feb 29, 2024
Slide 1: 2023 Annual General Meeting
2023 Annual General Meeting 29 February 2024 1
Slide 2: Travis Dillon - Chairman
Travis Dillon - Chairman 2
Slide 3: Board of Directors
Board of Directors Travis Dillon David Surveyor Guy Kingwill Margaret Zabel Chairman Managing Director & CEO Non-Executive Director Non-Executive Director Appointed May 2022 Appointed February 2023 Appointed November 2019 Appointed October 2022 Michelle Somerville Paul van Heerwaarden Brad Crump Non
Slide 4: Disclaimer and Basis of Preparation
DISCLAIMER AND BASIS OF PREPARATION 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 take into account the
Slide 5: Agenda
AGENDA 1. Chairman’s Address Company Overview Strategy Update 2. Managing Director’s Address 2023 Performance • Picture from SHV required Strategy and Transformation Outlook 3. Business of the AGM 5
Slide 6: Chairman's Address
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Slide 7: Select Harvests Overview
Select Harvests Overview One of the world’s largest almond growers, with a geographically diverse 9,371-hectare orchard portfolio • Listed on the ASX (SHV), with a market capitalisation of $502.4m (27 February 2024) and 421 employees (excluding external contractors). Company • Australia’s second lar
Slide 8: Orchard Portfolio
Orchard Portfolio One of the world’s largest almond growers, with a geographically diverse 9,371-hectare orchard portfolio Benefits of Geographic Diversity & Scale • Geographic diversity limits exposure to: - weather - disease spread - insect infestation • Positions the company to maximise harvest v
Slide 9: Asset Valuations and Net Assets
Asset Valuations and Net Assets Asset valuations are 67% higher than book value at 30 September 2023 Net Asset Value vs Market Value Market Value Variances to Book AUD $m 688.6 Value 90.0 • Net Assets per share increases from $3.40/share to $5.69/share using market 60.7 value 126.4 • Book value of a
Slide 10: Strategy Update
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Slide 11: Global Almond Consumption
Global Almond Consumption 15 countries account for ~ 3/4 of global almond market consumption Almond per capita consumption (kg) ALMOND MARKET BY CONSUMPTION: TOP 151 2022, thousand tonnes Last 5-year growth rate (Percent) Kernel2 In-shell 438 7% 361 Countries outside top 15 (~180 countries) account
Slide 12: Global Market Supply and Demand
Global Market Supply and Demand California accounts for ~75% of global almond production. A large increase in its production between 2020- 2022 has resulted in record levels of carry-in GLOBAL MARKET SUPPLY AND DEMAND Calendar years, thousand tonnes (percent of global production) 2,114 CAGR 2,045 ’1
Slide 13: Global Market Supply and Demand (continued)
Global Market Supply and Demand (continued) Prices have started to recover and are likely to continue over the next 2-3 years if oversupply reduces as expected 13
Slide 14: Turnaround Strategy 2023 - 2028
Turnaround Strategy 2023 - 2028 To be a leader in the supply of ‘better for you’ and ‘better for the VISION planet’, plant-based foods Our mission is to deliver sustainable returns to our shareholders by MISSION marketing premium almond products to the world THREE HORIZON 1 HORIZON 2 HORIZON 3 HORIZ
Slide 15: Key Priorities
Key Priorities 1. Ensuring the safety and wellbeing of all stakeholders 2. Successfully completing the upcoming harvest and investing in the 2025 crop 3. Process a record volume of product efficiently and at a high quality level 4. Continue to manage the detail of our cost base and deliver on opport
Slide 16: Managing Director's Address
Managing Director’s Address 16
Slide 17: Safety – Strong and Rapid Improvement
Safety – Strong and Rapid Improvement Total Recordable Injury Frequency Rate1 Key Areas of improvement: Injuries per million hours worked • “Felt Leadership” & increased safety visibility 35.8 • Building safety processes MTIFR – Safety conversations, Hazard identification & action before 30.1 LTIFR
Slide 18: FY2023 Financial Results
FY2023 Financial Results Full year financial results are in line with first half guidance • Lower 2023 crop volume ($74.5m) NPAT ($114.7m) • 2022 crop inventory quality ($24.5m) • Goodwill written off non-cash ($26m) Net Bank Debt/ 46.2% • Debt levels will be reduced sensibly overtime Equity Ratio •
Slide 19: Key Results Drivers – Volume
Key Results Drivers – Volume The lower 2023 crop volume significantly impacted SHV financial results Almond Volume MT 2022 Crop Selldown 28,250 28,312 • Actively managed and sold low quality 2022 crop carryover 22,690 23,250 kernel and inshell 19,771 • Remaining volume allocated to value add process
Slide 20: Key Results Drivers – Almond Price
Key Results Drivers – Almond Price SHV almond price reduced in FY2023, driven by market prices and crop quality Almond Market Price 1 In-shell US$/kg High-grade Kernel Depressed FY2023 Prices 8 Low-Grade Kernel • In 2023 global prices increased in the 7 first half, but fell as the year progressed 6
Slide 21: Key Drivers – Production Cost
Key Drivers – Production Cost Total Almond Production Cost1 Increased Production Costs $/kg 10.18 • Invested to grow 30,000MT but only produced 19,771MT - production 6.72 costs per kg spiked 5.37 5.63 5.88 4.73 • Increase in gross production costs of $25m driven by: – Fertiliser costs ($12.3m) due t
Slide 22: Bank Facilities – Debt and Cash
Bank Facilities – Debt and Cash Net debt increased but sufficient coverage from debt facilities remains FY2023 Increase in Net Debt Drivers of Higher Net Debt: Millions, AUD 260 • Less volume of almonds available to sell due to reduced 2023 crop • Reduction in price impacting 2023 12 23 190 crop val
Slide 23: Sustainability – People, Product & Planet Focus
Sustainability – People, Product & Planet Focus Total emissions have been reduced by 25% since 2021 Emissions Reductions • From FY21 to FY23 total emissions have been reduced by 25%: – Scope 1 change: - 34% – Scope 2 change: - 13% – Scope 3 change: +1% • Investment into new fumigation chambers reduc
Slide 24: Strategy & Transformation
STRATEGY & TRANSFORMATION 24
Slide 25: Select has a clear Strategic Path forward
Select has a clear Strategic Path forward Strategy is focused on delivering increased Shareholder returns through improved performance and growth Strategic Pillars Substantially greater Leadership in processing Maximise returns from Innovate to drive almond volume scale and efficiency almond crops s
Slide 26: Horticulture Productivity Strategy – Leverage The Core
Horticulture Productivity Strategy – Leverage The Core Improve the productive capacity of the company’s core assets through yield, quality and efficiency SHV HORTICULTURE PRODUCTIVITY STRATEGY Consistently produce high quality almonds Ambition at industry-leading yields for the lowest cost Leverage
Slide 27: Sales Strategy – Maximise the value of the crop
Sales Strategy – Maximise the value of the crop Maximise the return from the Company’s crops through focusing on five key initiatives SHV SALES STRATEGY Increase crop value through: Ambition Maximise return from the crop • Maximise pricing through key customers and geographies 1 2 3 4 5 Value chain
Slide 28: PMO – Strategy Execution and Discipline
PMO – Strategy Execution and Discipline Execution momentum building with growing profit impact and cash benefit Strategic Priorities Execution Profit Impact Count of initiatives Millions AUD FY23 FY24 H1 FY24+ 40 Substantially greater 52 almond volume 46 9 12 Leadership in FY23 Future processing sca
Slide 29: Outlook
SELECT HARVESTS. © . OUTLOOK’
Slide 30: FY2024 Outlook
FY2024 Outlook • Crop forecast 30,000MT, assumed quality profile in line with long term average SHV Crop • Harvest commenced end of January – two weeks earlier than normal • More than 75% of the 2024 crop is hedged at an AUD/USD of 0.66c • Industry commentary indicating: – Yield is likely to be 2.45
Slide 31: Key Messages
Key Messages FY2024 benefits expected from price recovery, transformation delivery and disciplined financial management • Poor result due to lower volume and lower price Challenging • Full year result consistent with first half expectations FY2023 • 2022 crop hangover closed out and 2023 crop sold •
Slide 32: Business of the AGM
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Slide 33: Business of the AGM
Business of the AGM Ordinary Business − Consideration of Financial Statements and Reports Resolutions − Resolution 1: Adoption of Remuneration Report − Resolution 2: Election of Director − Resolution 3: Participation by the Managing Director in the Long-Term Incentive Plan 33
Slide 34: Consideration of Financial Statements and Reports
Consideration of Financial Statements and Reports Q & A Session 34
Slide 35: Resolution #1: Remuneration Report
Resolution #1: Remuneration Report For: 45,859,224 Against: 5,783,205 Open-Usable: 401,130 35
Slide 36: Resolution #2: Election of Director
Resolution #2: Election of Director Paul van Heerwaarden Non-Executive Director Appointed October 2023 36
Slide 37: Resolution #2: Election of Director
Resolution #2: Election of Director For: 51,373,321 Against: 200,825 Open-Usable: 417,736 37
Slide 38: Resolution #3: Participation by the Managing Director in the Long-Term Incentive Plan
Resolution #3: Participation by the Managing Director in the Long-Term Incentive Plan For: 50,197,351 Against: 1,439,961 Open-Usable: 437,194 38
Slide 39: Thank You
THANK YOU Please direct any queries to: David Surveyor Brad Crump Andrew Angus Managing Director CFO and Company Secretary 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 found on the Select Harv
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