Select Harvests Limited · ASX:SHV

Select Harvests — H1 FY2017 Earnings Presentation

29 slides from Select Harvests's earnings presentation, Feb 28, 2017

1. Slide 1: Half Year ending 31 December 2016 - Results Presentation

   For personal use only Select Harvests Limited (“SHV”) Half Year ending 31 December 2016 - Results Presentation 28 February 2017

2. Slide 2: Disclaimer & Basis of Preparation

   Disclaimer & Basis of Preparation 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 advice to investors and does not ta

3. Slide 3: Agenda

   Agenda For personal use only Business Status Acquisition Financial Results & Analysis Business Update & Outlook Appendices 3

4. Slide 4: Business Status

   Business Status For personal use only Almond Division  Acquisition of Jubilee Orchard and an investment in Laragon Processing - increasing tonnage by 1,400MT per annum at maturity  Focussed on outcomes - improved yields, lower cost and improve quality – 2017 crop estimate 15,750 – 16,250 MT  Fund

5. Slide 5: Acquisitions

   Acquisitions For personal use only Jubilee Orchard  Located near Waikerie SA, with direct access to Murray River  792 acres Bearing  355 acres Non-Bearing  1,135ML of high security water  Average 3-Year yield 1.3MT/acre  http://jubileealmonds.com Jubilee Orchard, Waikerie, SA Laragon Almond, L

6. Slide 6: Significant Step Change Short term Volume Growth

   Significant Step Change Short term Volume Growth For personal use only *Current FY17 Forecast Investment in almond orchards & processing assets largely complete = increased future earnings 6

7. Slide 7: Financial Results & Analysis

   For personal use only Financial Results & Analysis 7

8. Slide 8: Income Statement

   Income Statement For personal use only Financial Result 1H16 1H17  Underlying EBIT $17.9m (1H16 $28.8m) - down ($m) 38% Revenue 166.4 126.5  Almond Div. $15.6 m (1H16 $25.0m) EBITDA - Underlying 34.7 25.1  down 38% Depreciation (5.9) (7.2)  Food Div. $5.1m (1H16 $6.7m) EBIT - Underlying 28.8 17.

9. Slide 9: 1st Half 2017 Performance

   1st Half 2017 Performance For personal use only Food Division Reported EBIT ($m) 1H16 1H17 Variance Food Division 6.7 5.1 -25%  Revenue of A$78.0m was down 15.0 % (A$91.7 million 1H16)  Commodity price reductions impact industrial price realisation, volumes have remained strong  Lucky Market shar

10. Slide 10: Understanding the Result

    Understanding the Result For personal use only Almond Division Result 1H16 1H17 ($m) Reported EBIT 29.1 15.6 Gain on asset sales (4.1) - EBIT (excluding gain on asset sales) 25.0 15.6 Benefit of 2015 crop revaluation on 1H16 (4.0) - Adverse impact of 2016 crop revaluation on 1H17 - 5.1 EBIT (adjuste

11. Slide 11: Balance Sheet

    Balance Sheet For personal use only ($m) Period Ending 31/12/2015 31/12/2016 Current Assets excl. Cash 163.2 138.0  Net Debt1 (inc. lease liabilities) $98.4m Cash 12.7 2.2  Net Debt2 (exc lease liabilities) $58.4 m Non Current Assets 276.3 309.3 449.5  Gearing (Net Debt to Equity) of 34.6% 1 Tota

12. Slide 12: Cash Flow

    Cash Flow For personal use only ($m) 1H16 1H17 Underlying EBITDA 34.7 25.1  Operating cash flow (pre-tax) $31.1m Change in Working Capital 48.3 8.3  Taxes paid of $25.3 m Taxes paid (25.3) Net Interest (2.2) (2.3)  Working capital decrease of $8.3m Cash flow from operating activities 80.8 5.8  P

13. Slide 13: Business Update & Outlook

    For personal use only Business Update & Outlook 13

14. Slide 14: Global Demand For Tree Nuts & Plant Protein

    Global Demand For Tree Nuts & Plant Protein For personal use only Consumption – Continues to grow  Tree nut consumption is up 59% in the last ten years  Almonds registered the highest growth @ 94% in the last ten years  Middle Income Countries (MIC) consumption has doubled in the last ten years (

15. Slide 15: Commodity Price Trend 2013 - 2017

    Commodity Price Trend 2013 - 2017 - AUD$/KG CFR For personal use only $40.00 $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $- Vietnamese Cashew WW320 Chinese Pinenut 600 Count Pistachio Inshell R&S California Walnuts LH&P Almond Kernel SSR Source: Internal company data Almond now well priced vs ot

16. Slide 16: California

    California For personal use only Californian Drought  Snowpack - Above Average  Snowpack 174% of normal as at 16 Feb / 134% of average as at 1 April  Water Storage - Above Average  Storage at 120% of average and 82% of capacity  Ground Water- Improving  It will not be solved in a single year 

17. Slide 17: Market Outlook – US Shipments & Pricing

    Market Outlook – US Shipments & Pricing For personal use only Positon Report Exports US Domestic Total TY LY TY LY TY LY Jan 108.51 84.25 29% 57.29 44.99 27% 165.8 129.24 28% Last 3mth 350.82 268.57 31% 158.78 136.61 16% 509.6 405.18 26% Last 6mth 780.82 545.22 43% 335.89 291.69 15% 1116.71 836.91 3

18. Slide 18: Select Harvests 2017 Crop Estimate

    Select Harvests 2017 Crop Estimate For personal use only Harvest has commenced in all states  Harvest commenced two weeks later, a result of milder growing conditions in spring and early summer  Good harvest conditions – weather outlook favourable 2017 Crop estimate 15,750 – 16,250 tonnes  2016 c

19. Slide 19: Select Harvests 2017 Goals

    Select Harvests 2017 Goals For personal use only Almond Division  Integration of Jubilee (Note: we did not acquire current crop)  Commissioning of H2E Biomass plant & alternate energy sources  2017 Harvest  Greenfield plant out preparation  Integration of new systems Food Division  Execute Chi

20. Slide 20: Major Project Update

    Major Project Update For personal use only Greenfield Development  Funding model delivering – 844 Ha (2,084 acres) planted out in July 16  Greenfield plantings displaying excellent tree health  302 Ha (725 acres) to be planted out in July 17 Project H2E - Biomass Electricity Cogeneration Facility

21. Slide 21: Strategy Map to 2025

    STRATEGY MAP TO 2025 HO RIZO N 1 – PERFECT T HE CURRENT M O DEL For personal use only Maximize Build our Optimise & Improve supply commodity systems & grow grow almond chain efficiency value through our people agri assets innovation VISION HO RIZO N 2 – T RANSIT IO N INTO INT EG RAT E D M O DEL SHV

22. Slide 22: Significant Step Change Short term Volume Growth

    Significant Step Change Short term Volume Growth For personal use only *Current FY17 Forecast 16% More Volume in 2018, 22% More Volume in 2019 = increased profitability 22

23. Slide 23: Thank you

    For personal use only Thank you Please direct any queries to: Paul Thompson Paul Chambers 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 global almond industry can be fo

24. Slide 24: Appendix

    For personal use only Appendix 24

25. Slide 25: Select Harvests - Financial History

    Select Harvests - Financial History For personal use only 2006 2007 2008 2009 2010 2011 2012 2013 2014* 2015 2016 SHV Historical Summary Units Total Sales (A$M) 217.9 229.5 224.7 248.6 238.4 248.3 251.3 191.1 188.1 223.5 285.9 EBIT (A$M) 38.4 40.5 27.1 26.8 26.0 15.4 19.6 37.7 31.3 89.6 41.3 EBIT Ma

26. Slide 26: Almond Orchards – Our productive foundation

    Almond Orchards – Our productive foundation 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 volume & reduce variance. Enables sequ

27. Slide 27: Select Harvests – Orchard Profile

    Select Harvests – Orchard Profile For personal use only Total Planted & Under Select Harvests Planted* Under Development Development Almond orchard portfolio (as at 31 December 2016) (as at 31 December 2016) (as at 28 February 2017) Acres Hectares Acres Hectares Acres Hectares Central region Company

28. Slide 28: Select Harvests – Orchard Age Profile

    Select Harvests – Orchard Age Profile For personal use only Significant growth & improvement occurred in SHV orchard portfolio in recent years - acquisition, replants, greenfields 28

29. Slide 29: Thank you

    For personal use only Thank you Please direct any queries to: Paul Thompson Paul Chambers 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 global almond industry can be fo

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