Select Harvests Limited · ASX:SHV

Select Harvests — FY2012 Earnings Presentation

27 slides from Select Harvests's earnings presentation, Aug 31, 2012

1. Slide 1: 2012 Full Year Results Presentation

   For personal use only Select Harvests Limited (“SHV”) 2012 Full Year Results Presentation 31 August 2012

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 Strategy & Outlook Summary Appendices 2

4. Slide 4: Overview

   Overview For personal use only  Reported FY12 Net Loss after Tax of $4.5m compared to reported FY11 Net Profit After Tax of $17.7m  Result includes impact of net adjustments (inc. write-downs) of $22.1m (pre-tax). Major items relate to WA Greenfield Project and obsolete processing assets  Underly

5. Slide 5: Overview

   Overview  Food Division business has improved significantly For personal use only  Performance improvement program delivering  Our brands and customer relationships have remained strong.  Company and Managed Orchards had their 3rd challenging year in a row  Significant uncontrollable events e.g

6. Slide 6: Agenda

   Agenda For personal use only Overview Results Discussion & Analysis Strategy & Outlook Summary Appendices 5

7. Slide 7: Financial Results Summary

   Financial Results Summary For personal use only Financial Result ($m) FY11 FY12 ($m) ($m)  FY12 Underlying EBIT of $19.6m (up 27% on prior year ) Reported Result  Underlying EBIT includes a fair value EBIT - Reported 21.9 (2.5) adjustment of $2.5m (FY11 $2.3m) Interest (3.4) (6.2)  Food division

8. Slide 8: FY12 Underlying EBIT Waterfall

   FY12 Underlying EBIT Waterfall 30 For personal use only Comparison of FY12 Reported EBIT & Underlying EBIT ($m) 25 20 15 10 5 0 WA Project Corporate Gain on Sale of FY12 EBIT - FY12 EBIT Processing Asset Impairment Water Underlying -5 - Reported Write-down -10 7

9. Slide 9: FY11 and FY12 Adjustments

   FY11 and FY12 Adjustments Item Amount Explanation For personal use only FY11 FY12 Discount on Acquisition (7.5)  Discount on acquisition of Almond orchards (net of Stamp Duty) acquired in FY11 Product recall 1.0  Costs associated with product recall in Food Division in FY11 Corporate 1.2  Restruc

10. Slide 10: WA Greenfield Development

    WA Greenfield Development  Overview For personal use only  3,949 acres planted (Feasibility study predicated on 10,000 acres)  22GL water entitlements secured to support 4,000 acres at maturity  Capital invested $61m ($4m feasibility, $36m land & infrastructure, $21m trees)  FY2013 capex commit

11. Slide 11: WA Greenfield Development - Write-Down

    WA Greenfield Development - Write-Down  Consideration Points For personal use only  Tighter capital markets  Tough operating conditions in base business  Higher and quicker payback alternatives competing for capital available to business  Cost outlook higher than business case  Outcome  Write

12. Slide 12: Business Unit – Almond Division

    Business Unit – Almond Division Company Orchards Owned Leased Managed Total For personal use only NSW 1,551 3,017 4,568 VIC 2,772 1,481 4,421 8,674 WA Greenfield Project 3,949 3,949 Total 8,272 4,498 4,421 17,191 Carina West Processing Facility (30,000 tonnes)  Australia’s largest vertically integr

13. Slide 13: Business Unit – Almond Division

    Business Unit – Almond Division Reported Underlying For personal use only EBIT ($m) FY11 FY12 FY11 FY12 Managed Orchards 11.6 9.3 11.6 14.2 Company Orchards 9.8 (12.9) 2.3 3.1 Almond Division 21.5 (3.6) 14.0 17.3  Performance  FY12 crop est. 5,830 tonnes (up 43% - in line with guidance) , Belveder

14. Slide 14: 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 13  Blen

15. Slide 15: Business Unit – Food Division

    Business Unit – Food Division Reported Underlying For personal use only EBIT ($m) FY11 FY12 FY11 FY12 Food Division 3.7 6.0 4.7 6.0  Performance  Strong underlying growth in 2012  Performance improvement  Increased plant productivity at Thomastown facility  Benefitted from almond market growth

16. Slide 16: Balance sheet

    Balance sheet For personal use only ($m) Year ending 30/06/2011 30/06/2012  Balance sheet reflects net adjustments of non-current assets by $22.1m Current Assets excl. Cash 83.9 75.9  $95m NAB debt facility in place Cash 7.4 1.0 comprising • Term debt $60m Non Current Assets 214.3 202.4 • Working

17. Slide 17: Cash flow

    Cash flow For personal use only ($m) FY11 FY12  Strong EBITDA to cash conversion  Working capital plateaued EBITDA - Underlying 20.6 25.7  Investing cashflows driven by: Change in Working Capital (18.5) (4.5)  Capex $9.6m Taxes Received 1.8 4.9  Trees $18.7m Net Interest (3.4) (4.1)  Proceeds

18. Slide 18: Agenda

    Agenda For personal use only Overview Results Discussion & Analysis Strategy & Outlook Summary Appendices 17

19. Slide 19: SHV's Business Today

    SHV’s Business Today  Australian Almond Market (FY11/12) Australian Almond Market by Category For personal use only  Australian production 41,279 tonnes (tonnes & %)  Domestic market 18,792 tonnes  Year on year market growth 13% 15,654  SHV Brands account for 5,000 + tonnes 18,792 36% Export -

20. Slide 20: SHV Strategy

    SHV Strategy Consolidation Business Improvement Growth For personal use only One Select Restore the Basics Build foundations Expand and grow  Exit Olam  Improve returns in Food Div  Leverage core competencies  Improve farm practices  Acquire almond orchards at  Orchard Industry top quartile at

21. Slide 21: Outlook

    Outlook  Almond Division positive For personal use only  Orchards  Initial crop evaluation is promising (pollination, water cost)  Independent experts engaged to ensure top quartile horticultural & management practices  Processing  Increased focus on quality and service  Greater emphasis on b

22. Slide 22: Agenda

    Agenda For personal use only Overview Results Discussion & Analysis Strategy & Outlook Summary Appendices 21

23. Slide 23: Summary

    Summary  New Leadership For personal use only  Sharper focus on delivering performance and improvement  Integrated business model  Source of strategic advantage  Australian competitors do some, but not all, of what SHV does  Confident SHV has the right strategy  SHV is well positioned  Good

24. Slide 24: Agenda

    Agenda For personal use only Overview Results Discussion & Analysis Strategy & Outlook Summary Appendices 23

25. Slide 25: 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

26. Slide 26: Long-term almond price dynamics

    Long-term almond price dynamics For personal use only 25

27. Slide 27: 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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