Ricegrowers Ltd. Class B · ASX:SGLLV
Ricegrowers Ltd. Class B — Shareholder Meeting (August 2020)
77 slides from Ricegrowers Ltd. Class B's shareholder meeting presentation, Aug 28, 2020
Slide 1: SunRice Group 2020 AGM and B Class Meeting ASX Announcement
ASX ANNOUNCEMENT 28 August 2020 SunRice Group 2020 Annual General Meeting and B Class Meeting – Chairman and Group CEO addresses and presentations Please find attached the following documents to be presented at the SunRice Group’s 2020 Annual General Meeting and separate B Class Meeting, both of whi
Slide 2: Chairman's Address – Laurie Arthur
1. CHAIRMAN’S ADDRESS – LAURIE ARTHUR, CHAIRMAN As we celebrate 70 years of SunRice, I acknowledge that Financial Year 2020 was a challenging year. The Board was clear from the outset that it would be difficult 12 months given the impacts of successive years of low water availability and high water
Slide 3: Chairman's Address (continued)
While our stated revenue goal of $2 billion under the 2022 Growth Strategy will now take longer to achieve, our innovation pipeline remains strong and we have the balance sheet strength to continue to pursue and integrate value accretive merger and acquisition opportunities. We have also taken the d
Slide 4: Chairman's Address: Board size and governance
We are clear that at 11 Directors, the Board is too large for a company of our size and took steps to ensure that we right size the Board and our governance frameworks for the future. Today’s resolution on this matter is designed to ensure that we are well placed to oversee the Group’s growth and th
Slide 5: Chairman's Address: Outlook and closing
volume from past crops, which is currently being milled, is expected to be exhausted in early 2021. Our intention is to utilise any excess seed to maintain a milling program at Leeton and Deniliquin for the period between the exhaustion of our current paddy, and the CY21 harvest. It is clear that th
Slide 6: Group CEO's Address – Rob Gordon
2. GROUP CEO’S ADDRESS – ROB GORDON, GROUP CEO Thank you Laurie and good morning to everyone who has joined us. At last year’s AGM in Jerilderie I don’t think any of us could have predicted that we would be gathering for this year’s AGM in this fashion. While we had intended to hold our meetings phy
Slide 7: Company history and growth
From building the Deniliquin Mill, to establishing Trukai Industries Limited and acquiring CopRice in the 1970s; to establishing our rice research division in the 1980s. Then in the 1990s, our Solomon Islands business, SolRice, was acquired, as was Riviana Foods – further diversifying the company’s
Slide 8: FY2020 challenges
But we did carry in approximately 300,000 tonnes of crop from 2018 – which although lower yielding – allowed us to set aside the 54,000 tonne crop and combine it with the 2020 crop to mill in the current Financial Year. We also activated our international sourcing capability to bridge the gap betwee
Slide 9: COVID-19 response
In our facilities in the Riverina, a number of employees who had been made redundant due to the small 2019 crop agreed to stay on for a period of time to help us respond to the sudden spike in demand. We put in place additional safety measures in our facilities – which meant that each time an em
Slide 10: FY2020 financial results
In Financial Year 2020 we delivered group revenue of $1.13 billion and Net Profit After Tax of $22.7 million, down 5% and 31% year-on-year respectively, and declared a fully franked dividend of 33 cents per B Class Share. We also paid high paddy prices of between $500 and $1350 per tonne dependent o
Slide 11: Supply chain reinvention
With Australian supply dropping from approximately 802,000 paddy tonnes in 2017, to 623,000 tonnes in 2018 – and then to 54,000 tonnes and 45,000 tonnes in 2020 – we have totally reinvented our supply chains. As this slide shows, for the current financial year we are sourcing rice from 12 countries
Slide 12: Growth initiatives and investments
Extension of our healthier rice-based snacks range to Rice Puffs and Rice Cracker Chips, as well as expanding our geographic footprint in snacks to the Middle East and Asia Acquiring and upgrading for a combined $6 million the FeedRite assets to expand CopRice’s pet food production capabilities
Slide 13: Riverina crop and water availability
The record low crops of the last two years – despite record high rice prices – are a reflection of the lack of water availability, and the very high water pricing, making rice growing almost impossible for most growers. While in part caused by drought, we also believe those impacts have been exacerb
Slide 14: Outlook and risk factors
Away from the Riverina, we continue to monitor a range of factors that have the potential to impact Group revenue and margins in the short-term, including: International rice prices The fluctuating Australian dollar affecting input costs in a number of the Group’s segments Ongoing deterioratin
Slide 15: Annual General Meeting August 2020
Annual General Meeting 28 August 2020 SunRice (ASX:SGL/SGLLV)
Slide 16: Important notice and disclaimer
Important notice This presentation is for information purposes Any person who receives this presentation This presentation should be read in only. This information is given in summary must seek advice on and observe any such conjunction with other publicly available form and does not purport to be c
Slide 17: Chairman's Welcome
Chairman’s Welcome Laurie Arthur 28 August 2020 3
Slide 18: Directors joining online
Directors joining online Mr. John Bradford Dr. Andrew Crane Mrs. Gillian Kirkup Mr. Ian Mason Mr. Jeremy Morton Dr. Leigh Vial Mr. Julian Zanatta 4
Slide 19: Joining by phone
Joining by phone Mark Dow, Partner Quentin Digby, Partner PricewaterhouseCoopers Herbert Smith Freehills 5
Slide 20: Agenda
Agenda Procedural matters Chairman’s address CEO’s presentation Questions and answers AGM resolutions General business Meeting close 6
Slide 21: Procedural matters
HELP NUMBER 1800 237 764 Procedural Voting will be by way of poll matters Ordinary resolutions require a 50% majority of votes cast to proceed Special resolutions require a 75% majority of votes cast to proceed Proxy and direct voting results already received will be displayed for each resolution Vo
Slide 22: Lodging your votes
Lodging Get Voting Card HELP NUMBER your votes 1800 237 764 Click “Get a Voting Card” (top and bottom of platform) Submit Details and Vote Enter your SRN/HIN or Proxy Number and postcode Click “Submit Details and Vote” Fill out your voting card for each Submit Details and Vote item of business Click
Slide 23: Asking questions
Asking Ask a Question HELP NUMBER questions 1800 237 764 Only A and B Class Shareholders are able to ask questions Click on “Ask a Question” Select “General Business” or a specific resolution Type in your question and click “Submit” Comments on resolutions can also be submitted through ‘Ask a Questi
Slide 24: Additional documents
Additional HELP NUMBER documents 1800 237 764 Click on “Downloads” to access the Notice of Meeting, SunRice Annual Report or Online Meeting Guide Link Market Services support staff are on standby to provide assistance 10
Slide 25: Chairman's Address
Chairman’s Address Laurie Arthur 28 August 2020 11
Slide 26: CEO's Presentation
CEO’s Presentation Rob Gordon 28 August 2020
Slide 27: Important notice and disclaimer
Important notice This presentation is for information purposes Any person who receives this presentation This presentation should be read in only. This information is given in summary must seek advice on and observe any such conjunction with other publicly available form and does not purport to be c
Slide 28: Agenda
Agenda 70 years of innovation Context for FY2020 results COVID-19 in focus FY2020 results Our strategy in action Riverina rice production Outlook for FY2021 14
Slide 29: 70 Years of Innovation
1990s 70 Years of Solomons Rice Company Limited (SolRice) is aquired to 2005 Growers vote to change the Innovation 1970s further expand markets for Riverina rice. A second mill opens in Deniliquin for brown co-operative’s structure. RCL registers as a company in 2005 and changes its Deniliquin Mill
Slide 30: Key performance statistics since the Millennium Drought
Key performance statistics since the Millennium Drought* $2 $234 Billion Million 106% 210% 40% In paddy payments In capital expenditure Increase in share performance $148 Million In dividends 53% Increase in Net Tangible Assets 15% Increase in total shareholder return ** between 2012 & 2020 Gearing
Slide 31: Context for FY2020 results
Context for • Only 5% of global demand sourced from the Riverina due to the small 2019 crop of 54,000 tonnes, at the time the second-smallest FY2020 results on record • Carried in approximately 300,000 tonnes of crop from 2018 which was lower yielding It was clear at the start of • Given the continu
Slide 32: Our approach to COVID-19
Our approach to COVID-19 Implementing new working arrangements to protect the health and wellbeing of our staff Maintaining business continuity and production to the highest levels possible Keeping in close contact with our key stakeholders, including our customers and suppliers 18
Slide 33: Impact of COVID-19
Impact of • Operational staff in Australia and around the world have continued to work to ensure that our products – a critical food staple in high COVID-19 demand in many of our markets – could continue to be produced and delivered to customers • Office-based employees have continued to launch new
Slide 34: Impact of COVID-19 (continued)
Impact of • We had increased demand for many of our retail products, in some cases more than 200% of forecasts due to changes in consumer COVID-19 shopping patterns. Sudden spike in demand exceeded existing levels of supply Continued • We ramped up production to respond to this event, however, there
Slide 35: COVID-19 & Hawaii's Economy
COVID-19 & Hawaii’s Economy Domestic Passenger Count Comparison 2019 International Passenger Count Comparison 2019 - 2019 vs. 2020 As of August 13 - 2019 vs. 2020 As of August 13 2020 2020 DOMESTIC PASSENGER COUNT INTERNATIONAL PASSENGER COUNT Source: State of Hawaii Department of Business, Economic
Slide 36: Results Snapshot
Results Snapshot SunRice’s FY2020 Financial Results Combined Group Revenue demonstrate the Group’s continued focus on earnings diversification $1.13bn (5%) year-on -year and resilience, as well as the agility developed in our people, supply Net Profit after Tax (NPAT) $23m (30%) chains and operation
Slide 37: Australian rice production versus global demand, and SunRice revenue
Australian rice production versus global demand, and SunRice revenue Riverina supply vs. global demand for Australian rice production versus SunRice products (paddy tonne equivalent) SunRice revenue Crop Size Crop Size (k/t Aus) (k/t Aus) Global Total Revenue Demand ($’M AUD) 23
Slide 38: SunRice Group Segment Performance
SunRice • International Rice had an increase in revenue year-on-year of 10%, but Net Profit Before Tax (NPBT) of -$1.4 million due in large part to the challenging conditions in Pacific markets and foreign exchange pressures. The Group International Rice segment absorbed the bulk of group overheads
Slide 39: Supply source countries of origin
Supply source countries of origin For Financial Year 2021 we are 1 million+ paddy tonnes Financial Year 2021 sourcing rice from 12 countries and are forecast to supply more than 1 million paddy tonnes of rice to our customers around the world. Source countries Australia Cambodia China Vietnam Myanma
Slide 40: Supply chain changes
Supply chain • In response to the small Riverina crops of the past two seasons, we have totally reinvented our supply chains changes • This has meant teams mobilising more than 60 changes of source for products sold into markets across the Australasian, Pacific, Middle East and Asian regions during
Slide 41: Our 2022 Growth Strategy
Our 2022 Growth Strategy What success Our objectives are to How we’re doing this Our Challenges looks like Improve the price we pay our growers Increase returns for our shareholders by... 1 Cementing a global supply chain in response to increased demand in branded products, ensuring quality and sust
Slide 42: Our 2022 Growth Strategy in action
Our 2022 Growth Strategy in action Establishing production of Brown Rice Chips in Launch of Low GI Australia Instant Rice cups in China Commencement of a $4.5 million upgrade to Leeton’s microwave rice facilities Continued improvement and scaling of our Lap Vo Mill in Vietnam Completion of construct
Slide 43: Organic growth
Organic • Planned launch of new infant rice-based product range in Australia and China (pictured below left) growth • Continued growth of our expanding rice snack portfolio through broader distribution channels internationally • Development of a new market entry strategy for the Philippines and Our
Slide 44: Strategic growth
Strategic • We are continuing to invest in upgrades to the FeedRite plant that growth CopRice acquired in Wangaratta – while this has been a cost to date, the plant is expected to come online later this year and deliver benefits We are continuing to leverage our strong balance sheet to • And we just
Slide 45: Riverina rice
Riverina rice • 91% reduction in production in the Riverina between 2018 and 2019, from 623,000 paddy tonnes to 54,000 paddy tonnes • The 2020 crop dropped further – at 45,000 paddy tonnes is the new second-smallest on record • SunRice offered record prices of $750 to $1500 per tonne Demonstrated re
Slide 46: Outlook for FY2021
Outlook for • The small Riverina crops harvested in 2019 and 2020, which are currently being processed, are expected to lead to a significant FY2021 under-recovery of the Australian Rice Pool segment in FY2021 • It is anticipated that this will lead to a Paddy Price Supplement being required in FY20
Slide 47: Outlook for FY2021 (continued)
Outlook for • Away from the Riverina, monitoring factors that have the potential to impact revenue and margins in the short-term, including: FY2021 • International rice prices Continued • Fluctuating Australian dollar affecting input costs in a number of segments With such a small volume • Deteriora
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Slide 49: Questions & Answers
TE = ae Questions & Answer
Slide 50: Annual General Meeting August 2020
Annual General Meeting 28 August 2020 SunRice (ASX:SGL/SGLLV) 36
Slide 51: Agenda Item: Financial Reporting
Agenda Item 1 Financial Reporting Consideration of the Financial Report, Directors’ Report and Independent Audit Report for the year ended 30 April 2020. 37
Slide 52: Resolution 1: Remuneration Report
Resolution 1 Remuneration Report “That the Remuneration Report for the year ended 30 April 2020 be adopted.” 38
Slide 53: Resolution 1: Remuneration Report votes
Resolution 1 Remuneration Report “That the Remuneration Report for the year ended 30 April 2020 be adopted.” Votes Received For 184 Against 38 Open 19 Abstain 0 39
Slide 54: Resolution 2: Re-election of Mr. Ian Glasson
Resolution 2 Re-election of Mr. Ian Glasson “That Mr. Ian Glasson, being eligible, be re-elected as a director of the Company for a period of three years.” 40
Slide 55: Resolution 2: Votes received
Resolution 2 Re-election of Mr. Ian Glasson “That Mr. Ian Glasson, being eligible, be re-elected as a director of the Company for a period of three years.” Votes Received For 213 Against 17 Open 19 Abstain 0 41
Slide 56: Resolution 3: Re-election of Ms. Luisa Catanzaro
Resolution 3 Re-election of Ms. Luisa Catanzaro “That Ms. Luisa Catanzaro, being eligible, be re-elected as a director of the Company for a period of two years.” 42
Slide 57: Resolution 3: Votes received
Resolution 3 Re-election of Ms. Luisa Catanzaro “That Ms. Luisa Catanzaro, being eligible, be re-elected as a director of the Company for a period of two years.” Votes Received For 218 Against 12 Open 19 Abstain 0 43
Slide 58: Resolution 4: Changes to the Constitution
Resolution 4 Changes to the Constitution “That the changes to the Company’s constitution described in the Explanatory Note to this resolution be made with effect from the close of the Annual General Meeting.” 44
Slide 59: Resolution 4: Votes received
Resolution 4 Changes to the Constitution “That the changes to the Company’s constitution described in the Explanatory Note to this resolution be made with effect from the close of the Annual General Meeting.” Votes Received For 210 Against 19 Open 20 Abstain 0 45
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Slide 61: General Business
Annual General Meeting General Business SunRice (ASX:SGL/SGLLV) 47
Slide 62: AGM close
AGM close B Class Meeting to start on: https://agmlive.link/SGLB20 Please select ‘Exit Meeting’ from the AGM screen before logging in to the B Class Meeting AGM voting will close in five minutes AGM and B Class Meeting results will be posted on the ASX and SunRice website Thank you for your attendan
Slide 63: B Class Meeting August 2020
B Class Meeting 28 August 2020 SunRice (ASX:SGL/SGLLV)
Slide 64: Important notice and disclaimer
Important notice This presentation is for information purposes Any person who receives this presentation This presentation should be read in only. This information is given in summary must seek advice on and observe any such conjunction with other publicly available form and does not purport to be c
Slide 65: Chairman's Welcome
Chairman’s Welcome Laurie Arthur 28 August 2020
Slide 66: Directors joining online
Directors joining online Mr. John Bradford Dr. Andrew Crane Mrs. Gillian Kirkup Mr. Ian Mason Mr. Jeremy Morton Dr. Leigh Vial Mr. Julian Zanatta
Slide 67: Joining by phone
Joining by phone Mark Dow, Partner Quentin Digby, Partner PricewaterhouseCoopers Herbert Smith Freehills
Slide 68: Agenda
Agenda Procedural matters Meeting resolution General business Meeting close
Slide 69: Procedural matters
HELP NUMBER 1800 237 764 Procedural Voting will be by way of poll matters Resolution 1 requires a 50% majority of votes cast to proceed Proxy and direct voting results already received will be displayed in advance Voting will close five minutes after the meeting ends 7
Slide 70: Lodging your votes
Lodging HELP NUMBER your votes 1800 237 764 Click “Get a Voting Card” (top and bottom of platform) Submit Details and Vote Enter your SRN/HIN or Proxy Number and postcode Click “Submit Details and Vote” Fill out your voting card for each Submit Details and Vote item of business Submit Vote Click “Su
Slide 71: Asking questions
Asking HELP NUMBER questions 1800 237 764 Only A and B Class Shareholders are able to ask questions Click on “Ask a Question” Select “General Business” or a specific resolution Type in your question and click “Submit” Comments on Resolution 1 can also be submitted through ‘Ask a Question’ Submit Que
Slide 72: Additional documents
Additional HELP NUMBER documents 1800 237 764 Click on “Downloads” to access the Notice of Meeting, SunRice Annual Report or Online Meeting Guide Link Market Services support staff are on standby to provide assistance
Slide 73: B Class Meeting
B Class Meeting 28 August 2020 SunRice (ASX:SGL/SGLLV)
Slide 74: Resolution 1: Long Term Incentive Award for the CEO
Resolution 1 Long Term Incentive Award for the CEO “That approval is given for the Company to grant securities to the Chief Executive Officer, Mr. Robert Gordon, as his Long Term Incentive Award on the terms set out in the Explanatory Notes to the Notice of Meeting.” 12
Slide 75: Resolution 1: Votes received
Resolution 1 Long Term Incentive Award for the CEO Votes Received For 19,103,903 Against 6,105,887 Open 1,262,242 Abstain 56,903 13
Slide 76: B Class Meeting General Business
B Class Meeting General Business SunRice (ASX:SGL/SGLLV)
Slide 77: B Class Meeting close
B Class Meeting close B Class voting will close in five minutes Both AGM and B Class Meeting results will be posted on the ASX and SunRice website Thank you for your attendance