Slide 1: Half Year ending 31 December 2017 Results Presentation
Click to edit Master title style For personal use only Select Harvests Limited (“SHV”) Half Year ending 31 December 2017 ‐ Results Presentation 27 February 2018 Click to edit Master text styles 1
Slide 2: Disclaimer & Basis of Preparation
Disclaimer & Basis of Preparation Click to edit Master title style For personal use only 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 ad
Slide 3: Agenda
Agenda Click to edit Master title style For personal use only Financial Results & Analysis Market Update & Outlook Business Update & Outlook Appendices Click to edit Master text styles 3 3
Slide 4: Select Harvests 2018 Crop & Price Estimate
Select Harvests 2018 Crop & Price Estimate Click to edit Master title style For personal use only 2018 Harvest has commenced in all states Harvest commenced in early February (starting in South Australia) Commenced on immature trees and nonpareil only Good harvest conditions – weather conditio
Slide 5: Basis of accounts preparation and sensitivities
Basis of accounts preparation and sensitivities Click to edit Master title style For personal use only In line with Accounting Standard – AASB 141 Agriculture SHV must forecast the profit expected from the 2018 crop. 50% of this forecasted profit is included in the 1H18 accounts and represents 80% o
Slide 6: SHV Income Statement
SHV Income Statement Click to edit Master title style For personal use only $000’s 1H FY2017 1H FY2018 % 1H FY2017 1H FY2018 % Normalised EBIT flat year on Reported Reported Normalised Normalised year ‐ $13.2M vs $13.4M Revenues 126,457 112,946 (11%) 122,339 112,946 (8%) Almond Division Normalis
Slide 7: Movement in SHV Group EBIT (A$M)
Movement in SHV Group EBIT (A$M) Click to edit Master title style For personal use only Movement in SHV Group EBIT (A$M) – 1H17 Reported to 1H18 Normalised 20 2.4 1.6 0.6 17.9 1.6 4.5 15 3.5 2.0 0.3 13.4 13.2 $M 10 5 0 1H17 Reported Prior period 1H17 Normalised 2018 Estimated 2018 Estimated Orchard
Slide 8: Balance Sheet
Balance Sheet Click to edit Master title style For personal use only Period Ending Capital Raising (completed Nov 2017): ($m) 31/12/2016 31/12/2017 Pay for Jubilee almond orchards + Current Assets excl. Cash 138.0 134.0 1,335 ML of high security water Cash 2.2 0.7 Restore Balance Sheet strengt
Slide 9: Cash Flow
Cash Flow Click to edit Master title style For personal use only ($m) 1H17 1H18 Operating cash flow (pre‐tax) $17.7m (1H17 Normalised EBITDA 20.6 21.2 $31.1m) Taxes paid of $4.7m (1H17 $25.3m) Change in Working Capital 12.8 (0.6) Working capital increase of $0.6m (1H17 Taxes paid (25.3) (4.7)
Slide 10: 1H 2018 Divisional Performance
1H 2018 Divisional Performance Click to edit Master title style For personal use only Almond Division Normalised EBIT ($m) 1H17 1H18 Variance Almond Division 11.1 12.6 13% Normalised EBIT up 14% (15,000 MT vs 14,100 MT) and price ($7.75/kg vs $7.43/kg) Demand fundamentals remain strong Changes
Slide 11: Major Projects
Major Projects Click to edit Master title style Project H2E (Biomass electricity cogeneration facility) For personal use only ̶ Now in the Commissioning phase ‐ well progressed and on target ̶ No further delays ‐ fully operational in April 2018 ̶ Partly mitigates increasing energy cost pressure in t
Slide 12: Safety, Sustainability & Diversity
Safety, Sustainability & Diversity Click to edit Master title style For personal use only Safety ̶ Agriculture is one of Australia’s most dangerous industries ̶ Select Harvests Zero Harm Safety and Wellbeing Strategy focus is to: ̶ Prevent injury before it occurs ̶ Improve our safety performance & i
Slide 13: Agenda
Agenda Click to edit Master title style For personal use only Financial Results & Analysis Market Update & Outlook Business Update & Outlook Appendices Click to edit Master text styles 13 13
Slide 14: Global Supply and Demand
Global Supply and Demand Click to edit Master title style For personal use only DEMAND Ongoing research supporting improved health through consumption Increased usage as an ingredient: cereals, confectionary, beverages and snacking Movement to Mediterranean diets globally and the movement to W
Slide 15: US Water Conditions
US Water Conditions Click to edit Master title style For personal use only Snowpack – Well Below Average ‐ Significantly different to last year Snowpack 20% of normal as at 20 Feb 2018 (16 Feb 2017 ‐ 174%) / 16% of average as at 1 April (last year 134%) Water Storage – Still Above Average ‐ Bu
Slide 16: Tree Nut Pricing
Tree Nut Pricing Click to edit Master title style For personal use only Source: Internal company data Click to edit Almonds now Master text well exceptionally styles priced vs other tree nuts – manufacturers shifting to include almonds 16 16
Slide 17: Agenda
Agenda Click to edit Master title style For personal use only Financial Results & Analysis Market Update & Outlook Business Update & Outlook Appendices Click to edit Master text styles 17 17
Slide 18: Strategy & Priorities
Strategy & Priorities Click to edit Master title style For personal use only H O R I ZON 1 ‐ P E R F EC T T H E C U R R E N T M O D E L Maximize Build our Optimise & commodity Improve supply systems & grow grow almond value through chain efficiency our people agri assets innovation VISION H O R I ZO
Slide 19: Volume Growth
Volume Growth Click to edit Master title style For personal use only *Yields by tree age ‐ refer slide 42 Click to edit Master text styles Investment in almond orchards & processing assets largely complete = increase future earnings 19 19
Slide 20: 2018 Management Focus
2018 Management Focus Click to edit Master title style Cost Base For personal use only Comprehensive review completed on orchard related costs delivering a 9% cost per acre reduction. Detailed review of processing costs underway ‐ reductions impacting processing of the 2018 crop. Actions in pl
Slide 21: Key Take Outs
Key Take Outs Click to edit Master title style Fundamentals of the business & industry remain strong For personal use only Global consumption of plant protein & almonds continues to grow at 6‐8% per annum Almond growth strategy is in place 15,000MT in 2018, 18,000 MT in 2020 building to 21,000MT
Slide 22: Thank you
Click to edit Master title style For personal use only Thank you Please direct any queries to: Paul Thompson Brad Crump Andrew Angus Managing Director Chief Financial Officer Investor Relations +61 3 9474 3544 +61 3 9474 3544 +61 402 823 757 Please note that background material/data regarding the gl
Slide 23: Select Harvests - Financial History
Select Harvests ‐ Financial History Click to edit Master title style For personal use only Source: Company Data Click to edit Master text styles 23 23
Slide 24: Prior estimates have a material impact in subsequent periods
Prior estimates have a material impact in subsequent periods Click to edit Master title style For personal use only Almond Division Result 1H17 1H18 ($m) Reported EBIT 17.9 12.1 - At 1H17 50% of the FY17 crop was recognised at 16,000 MT at a price of $7.70/kg – the actual position (adjusted in 2H17)
Slide 25: Select Harvests - Orchard Profile
Select Harvests – Orchard Profile Click to edit Master title style For personal use only Total Planted & Under Select Harvests Planted* Under Development Development Almond orchard portfolio (as at 30 June 2017) (as at 31 Dec 2017) (as at 31 Dec 2017) Acres Hectares Acres Hectares Acres Hectares Cen
Slide 26: US Conditions - Market - Shipments
US Conditions – Market – Shipments Click to edit Master title style For personal use only January 2018 Positon Report US Export Shipments US Domestic Shipments US Total Shipments Last Year This Year Growth Growth Last Year This Year Growth Growth Last Year This Year Growth Growth (million lbs) (%) (
Slide 27: Almond Orchards - Our productive foundation
Almond Orchards – Our productive foundation Click to edit Master title style For personal use only Geographic diversity Secure access to diverse limits exposure to: water sources: − Weather − River Water − Disease spread − Aquifers − Insect infestation Positions the company to maximise harvest volum
Slide 28: Select Harvests - Orchard Age Profile
Select Harvests ‐ Orchard Age Profile Click to edit Master title style For personal use only Significant growth Click to edit & improvement Master text styles occurred in SHV orchard portfolio in recent years ‐ acquisition, replants, greenfields 28 28
Slide 29: Definitions & Explanations
Definitions & Explanations Click to edit Master title style For personal use only ■ Normalised Earnings Before Interest and Tax (“EBIT”) is a non‐International Financial Reporting Standards (“IFRS”) measure calculated by adding back interest expense and any adjustments relating to prior year crops t
Slide 30: US Conditions - Climate - California Snowpack & Reservoirs
US Conditions – Climate – California Snowpack & Reservoirs Click to edit Master title style For personal use only Source: Californian Government Department of Water Resources Click to edit As atMaster text styles 22 February, the snowpack is 19% of average and 16% of 1 April average 30 30
Slide 31: Useful Almond Industry websites
Useful Almond Industry websites Click to edit Master title style For personal use only Industry Associations • Californian Almond Board www.almondboard.com Industry Reports • US Crop Forecasts (Subjective, Objective) http://www.almonds.com/growers/resources/crop‐forecasts • Monthly Almond Position R