Select Harvests Limited · ASX:SHV

Select Harvests — H1 FY2013 Earnings Presentation

21 slides from Select Harvests's earnings presentation, Feb 21, 2013

  1. Slide 1: Half Year ending 31 December 2012 - Results Presentation

    For personal use only Select Harvests Limited (“SHV”) Half Year ending 31 December 2012 - Results Presentation 21 February 2013

  2. Slide 2: Disclaimer & Basis of Preparation

    Disclaimer For personal use only Disclaimer & Basis of Preparation This presentation is provided for information purposes only. The information contained in this presentation is not intended to be relied upon as advice to investors and does not take into account the investment objectives, financial

  3. Slide 3: Agenda

    Agenda For personal use only Overview Results Discussion & Analysis Outlook Summary Appendices 3

  4. Slide 4: Overview

    Overview  Reported 1H13 Net Loss after Tax of $19.5m, compared to reported 1H12 Net Profit After Tax (“NPAT”) of $6.0m For personal use only  Result includes impact of write-downs of $39.9m (pre-tax), $27.9 m (post tax) relating to WA Greenfield Project  Excluding the impact of WA write down  1H

  5. Slide 5: Overview

    Overview  Performance of both divisions improved considerably For personal use only  Almond Division EBIT $12.1m, up 53% vs. pcp  Food Division EBIT $4.0m, up 15% vs. pcp  Decision to impair WA  Lack of scale  Horticultural challenges - high risk  Unforseen uncontrollable costs  Capitalising

  6. Slide 6: Financial Results Summary

    Financial Results Summary For personal use only Financial Result ($m) 1H12 1H13  1H13 EBIT of $14.4m (up 53% vs. pcp) ($m) ($m)  Almond EBIT $12.2m, up 53% vs. pcp  Food EBIT $4.0m, up 15% vs. pcp Revenue 132.8 108.4 EBITDA 12.3 17.3 Depreciation (2.9) (2.9)  Corporate costs $1.8m (down 11% vs.

  7. Slide 7: WA - Background

    WA - Background For personal use only  Initial Business Case:  Size: 10,000 acres of greenfield orchards & processing facility  Strategy: Geographic diversity, access to water and proximity to customers  Funding: SHV & partners  Status:  Land 3,949 acres (1,598 hectares) planted  Impairment $

  8. Slide 8: WA Impairment

    WA Impairment For personal use only  Review Conclusion  Almonds can be grown in Dandaragan Region of WA  Planted area lower than anticipated  Water extraction costs 50% higher than Eastern States  Higher infrastructure costs, especially bores  Horticultural environment challenging due to clima

  9. Slide 9: Business Unit – Almond Division

    Business Unit – Almond Division Reported For personal use only EBIT ($m) 1H12 1H13 Variance Managed Orchards 5.5 3.2 (39%) Company Orchards 2.5 8.9 260% Almond Division 7.9 12.1 53%  2013 Crop estimate  Area - 8,736 acres - this excludes acquisition of 1,286 acres (520 hectares) subsequent to 31/1

  10. Slide 10: Business Unit – Food Division

    Business Unit – Food Division Reported For personal use only EBIT ($m) 1H12 1H13 Variance Food Division 3.5 4.0 15%  Improved performance driven by margin mix and cost saving initiatives  Cost reductions driven by better labour management & increased machine efficiencies  Range rationalisation &

  11. Slide 11: Balance sheet

    Balance sheet For personal use only ($m) Period 31/12/2011 31/12/2012  Net Debt is $61.2m, down $21.3 (or ending 25.8%) on pcp Current Assets excl. Cash 80.5 79.0 Cash 0.3 5.0  Gearing (Net Debt to Equity) of 43.8% Non Current Assets 232.6 167.3  36.9% pre WA write down Total Assets 313.4 251.3 C

  12. Slide 12: Cash flow

    Cash flow For personal use only ($m) 1H12 1H13  Operating cash flow stable at $11.5m  Net cash flow of $5.0m, up from ($5.8m) EBITDA 9.4 17.3  Investing cash flows of ($4.5m), less than Change in Working Capital 3.9 (4.2) Operating cash flow & down substantially from ($19.7m): Taxes Received - 0.

  13. Slide 13: Business Outlook

    Business Outlook  Almond Division For personal use only  Orchards  Harvest is underway  Quality and Volume indications are good  Positive impact of 1,286 acres (520 hectares) acquired in Jan/Feb 2013  Processing  Increased focus on quality  Pasteuriser commissioned by April  Food Division 

  14. Slide 14: Future Direction

    Future Direction  Almond Division For personal use only  Orchards  Greater emphasis on benchmarking: Yield, Quality and Cost  Value enhancing acquisitions  Processing  Actively seeking new business  Food Division  Innovation and insight driven strategies to drive product growth  Supply chai

  15. Slide 15: Rationale for Investment in Select Harvests

    Rationale for Investment in Select Harvests For personal use only 1. Leadership Focussed on Results • Performance improvement, delivering results & quality 2. Integrated business model • Source of strategic advantage • Creating value at all stages of the value chain 3. Growth Industry • Developed ec

  16. Slide 16: Appendix

    For personal use only Appendix 15

  17. Slide 17: Business Unit - Almond Division - Detail

    Business Unit - Almond Division - Detail Orchard Management Area Almond Processing Area For personal use only Company Orchards Acres Hectares Acres Hectares Owned 4,013 1,624 4,013 1,624 Leased 1,481 600 1,481 600 Victoria 5,494 2,224 5,494 2,224 Owned 1,511 612 1,511 612 Leased 3,017 1,221 3,017 1,

  18. Slide 18: Business Unit – Food Division

    Business Unit – Food Division  MARKET LEADING BRANDS  KEY CATEGORIES For personal use only  Nuts  Snack Foods  Private Label  Health Foods  Fresh Produce  Muesli  Blends  Dried Fruits PROCESSING CAPABILITY KEY CUSTOMERS  Blanching  Slicing  Slivering  Meal  Pastes  Roasting 17  Blen

  19. Slide 19: Global supply-demand dynamic attractive

    Global supply-demand dynamic attractive For personal use only  Global market worth an estimated US$4.5 billion  Supply and demand have grown at 8% CAGR over past decade  Current demand growth trending above average growth rate; average supply growth cannot be maintained due to slow-down in recent

  20. Slide 20: Long-term almond price

    Long-term almond price For personal use only Almond Price AUD/KG Nonpareil (1993 - 2013) $14.00 $12.00 $10.00 $8.00 $6.00 $4.00 $2.00 $0.00 Note: this chart is for indicative purposes only – it represents one premium almond grade (of the many that Select Harvests produce and sell) and its sole reaso

  21. Slide 21: Select Harvests Food Products - Brand Summary

    Select Harvests Food Products - Brand Summary • Market leader in the cooking nut category. For personal use only • Cooking Nut product range: almonds, walnuts, cashews, hazelnuts, brazil nuts, pine nuts, pistachios, macadamias, sunflower seeds and pepitas (value share 37% in the MAT to 22.07.12) • S

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