Select Harvests Limited · ASX:SHV
Select Harvests — BBY Emerging Companies Conference 2013
31 slides from Select Harvests's conference presentation, Jun 25, 2013
Slide 1: BBY Emerging Companies Conference Presentation
For personal use only Select Harvests Limited (“SHV”) BBY Emerging Companies Conference Presentation 26 June 2013
Slide 2: Disclaimer & Basis of Preparation
Disclaimer For personal use only Disclaimer & 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
Slide 3: SHV Background
SHV Background Listed on ASX in 1978 For personal use only History Developer and manager of orchards & almonds Service provider to Managed Investment Schemes (“MIS”) Developed a significant portion of the current Australian almond industry Heavily reliant on government, MIS and a single
Slide 4: SHV Board
SHV Board For personal use only Name Title Date joined Board Michael Iwaniw Chairman November 2011 Paul Thompson Managing Director July 2012 Fred Grimwade Non-Executive Director July 2010 Ross Herron Non-Executive Director January 2005 Michael Carroll Non-Executive Director March 2009 Paul Riordan N
Slide 5: SHV Executive Team
SHV Executive Team For personal use only Name Title Paul Thompson Managing Director Peter Ross GM Horticulture Bruce Van Twest GM Operations Mark Eva GM Consumer Sales & Marketing Laurence Van Driel Group Trading Manager Paul Chambers CFO/Company Secretary Tom Kite HR Manager 5
Slide 6: Select Harvests Snapshot
Select Harvests Snapshot • SHV is Australia’s leading integrated almond business with significant positions throughout the entire almond value chain. For personal use only Orchards Processing Sales & Marketing Summary of Capability Portfolio 11,449 acres (4,635 hectares “ha”) Primary Processing 30KT
Slide 7: Brands Customers & Capability
Brands Customers & Capability 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 Retail Slivering Meal Food Service Pas
Slide 8: SHV Orchard Profile - A Competitive Advantage
SHV Orchard Profile - A Competitive Advantage SHV Company Orchards (Owned & Leased) - Age Profile (Years) - % For personal use only . (as at 5 Feb 2013) 43% of SHV Company 30.0%Orchards will reach 15% of SHV Company Orchards economic maturity in next 2 have passed peak economic maturity years 25.0%
Slide 9: Almond Trees Long Life & Lead Time to Maturity
Almond Trees Long Life & Lead Time to Maturity For personal use only Almond trees take 7 years to mature, then produce at that level for approx. 18 more years before tapering 1.60 1.50 1.40 1.30 Yield (Tonnes/Acre) 1.20 1.10 1.00 0.90 0.80 0.70 0.60 0.50 0.40 0.30 0.20 0.10 0.00 Year 19 Year 30 Ye
Slide 10: Why Almonds? - Sustainable Positive Fundamentals
Why Almonds? - Sustainable Positive Fundamentals For personal use only Tight Supply Long lead time to mature production (7 years) 18-21 years of subsequent mature production Strong Demand Developed Economies - healthy eating Developing Economies - affluence shift from carbohydrate to pro
Slide 11: Why Almonds? - Health & Economic Benefits
Why Almonds? - Health & Economic Benefits Nutrient Content (%) & Price (A$/Kg) of a Range of Tree Nuts For personal use only 30.0% $60 $53 25.0% $50 21.2% 21.0% 20.0% $40 $33 $32 15.3% 15.2% $31 15.0% 15.0% 14.3% $30 13.7% 12.2% $25 $20 $22 $20 9.9% $20 9.7% 9.2% 9.6% 10.0% $20 7.5% 7.8%8.0% 6.7% 5.
Slide 12: Why Almonds? - Both Dominate & Versatile
Why Almonds? - Both Dominate & Versatile Global Tree Nut Production 2006-2011 For personal use only 1,200,000 Almond Share of Global Tree Nut Production 2006 2011 Increase 1,000,000 Volume - Tree Nuts 2.77MT 3.10MT 0.32MT Volume - Almonds 0.67MT 1.11MT 0.44MT % of Global Tree Nut Production - Almond
Slide 13: Why Almonds? - Supply-Demand Dynamic Attractive
Why Almonds? - Supply-Demand Dynamic Attractive Global market worth an estimated For personal use only 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 i
Slide 14: Almond Price History
Almond Price History Long Term Almond Price (NPS 23/25) and Exchange Rate For personal use only $14.00 $1.5000 $1.3000 $12.00 $1.1000 $10.00 Almond Price (A$/Kg, US$/Kg, US$/lb) $0.9000 AUD/USD Exchange Rate $8.00 $0.7000 Note: this chart is for indicative $6.00 purposes only – it represents $0.5000
Slide 15: SHV 2012/13 Activity
SHV 2012/13 Activity Reviewed strategy For personal use only Restructured executive responsibilities Merged horticultural and processing offices Acquired of 1,286 acres of mature orchards Gained additional 3rd party processing business Debt reduction: water sale and working capital manag
Slide 16: SHV Risk Mitigation
SHV Risk Mitigation Area Action For personal use only Farming Practices • Empowered farm management • Introduced Harvest guidelines to reduce weather exposure Management Tools • Great on-farm KPI’s & reporting • Introduction of Leaf Bomb Pressure Test technology Processing Standards • Re-introductio
Slide 17: SHV Path Forward – Phases
SHV Path Forward – 3 Phases LEGEND For personal use only •Done Consolidation Business Improvement Growth •Underway •Future One Select Restore the Basics Build foundations Expand and grow Exit Olam Improve returns in Food Div Leverage core competencies Improve farm practices yield Acquire a
Slide 18: Growth Opportunities
Growth Opportunities Orchards For personal use only Better horticultural performance across all trees Maturing of immature trees Replant older trees Replant more productive varieties & at higher densities Processing New processing contracts Farm gate purchasing Orchard acquisitions
Slide 19: Select Harvests Update
Select Harvests Update Orchard replant program For personal use only 550 acres (223 ha) being replanted FY14 9,450 bearing acres (3,824 ha) FY14 Frost mitigation Installed frost mitigation on more highly exposed almond farms in NSW – 1,166 acres (472 ha) Bees Signed 3 year Bee Supply A
Slide 20: Why Select Harvests?
Why Select Harvests? For personal use only 1. Excellent Industry Fundamentals 4. Competitive Advantage: Quality Assets Supply/Demand 85% orchards mature in 2 years Counter-cyclical to USA State of Art Carina West processing 2. Integrated Business Model facility Orchards Market leading br
Slide 21: What we are building
What we are building For personal use only A strong and trustworthy company that looks after stakeholder interests A business that can manage the dynamic agricultural cycle and can mitigate the inherent risks A company that responds to the challenges and learns from the experience A cash gen
Slide 22: Thank you
For personal use only Thank you Please direct any queries to: Paul Thompson, Managing Director, +61 3 9474 3544 Paul Chambers, Chief Financial Officer, +61 3 9474 3544 Andrew Angus, Investor Relations, +61 402 823 757 22
Slide 23: Select Harvests Financial History
Select Harvests Financial History 2006 2007 2008 2009 2010 2011 2012 For personal use only SHV Historical Summary Units Total Sales (A$M) 217.9 229.5 224.7 248.6 238.4 248.3 246.8 EBIT (A$M) 38.4 40.5 27.1 26.8 26.0 22.6 19.6 EBIT Margin (EBIT/Sales - %) (%) 17.6% 17.6% 12.1% 10.8% 10.9% 9.1% 7.9% P
Slide 24: Almond Division – Orchards & Processing
Almond Division – Orchards & Processing Farmed Orchard Area Almond Processing Area For personal use only Controlled 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 1,22
Slide 25: Orchards – Geographic Diversity
Orchards – Geographic Diversity Robinvale (Ouyen) January July For personal use only Temp - Avge Min (Deg C) 15.7 4.3 Robinvale to Hillston - Avge Max (Deg C) 32.4 15.2 382km Avge Annual Rainfall (mm) 333.5 4 hours drive time Hillston January July Temp - Avge Min (Deg C) 18.3 3.7 - Avge Max (Deg C)
Slide 26: Key Drivers - Weather - Annual Almond Cycle
Key Drivers - Weather - Annual Almond Cycle Adverse weather is biggest threat For personal use only Dormancy Nuts Mature Almond Trees are dormant between Formation of Fruit/Kernel, Hull, •Pollination – Wet weather & Wind impacts May-July Leaves •Petal fall to early nutlet development – Frost impacts
Slide 27: Why Almonds? - Aust. Production Counter-Cyclical
Why Almonds? - Aust. Production Counter-Cyclical Global Almond Consumption 2011/12 For personal use only Global Almond Production 2011/12 EU-27 27% United States United States 7% India 9% 3% EU-27 United Arab Emirates 5% 2% Australia Vietnam 1% Turkey 4% Turkey 0% Chile 3% Canada 86% 35% Other 3% Ja
Slide 28: Why Almonds? - US Almond Production Plateauing
Why Almonds? - US Almond Production Plateauing Californian Almond Acreage, Yield & Production For personal use only Year Bearing Area Non- Bearing Area Yield Production (acres) (acres) (lbs/acre) (tonnes/acre) (lbs) (tonnes) 1995 418,000 65,700 885 0.4 370,000,000 168,182 1996 428,000 72,400 1,190 0
Slide 29: Why Almonds? – Global Super Food
For personal use only 0.00 0.25 1.25 1.50 0.50 0.75 1.00 1.75 2.00 2.25 Fromage Frais Light - 150 g Reduced fat yoghurt - 200 g Tofu - 120 g Cooked rice - 400 g Lentils - 150 g Cooked pasta - 330 g Small eggs - 2 Lean lamb - 35 g * Lean chicken - 40 g * Cottage cheese - 70 g Grilled fish - 50 g Whol
Slide 30: Australian Almond Industry Snapshot
Australian Almond Industry Snapshot For personal use only Company Orchards Processing Sales & Marketing Select Harvests 11,449 acres (4,635 ha) – Primary Processing 30KT Consumer, Foodservice & 15% market share Robinvale Vic Industrial businesses Global Nut Trader Vic & NSW Value Added Processing Ro
Slide 31: US Crop Update
US Crop Update For personal use only 2 May 2013 USDA National Agricultural Statistics Service (NASS) Subjective Estimate 2013 US crop estimate 2.0 Billion lbs 5.8% higher than 2012 actual Yield per acre 3% higher than the actual 2012 crop Many orchards are on water allocation Dates to wa
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