Select Harvests Limited · ASX:SHV
Select Harvests — H1 2020 Earnings Presentation
32 slides from Select Harvests's earnings presentation, May 22, 2020
Slide 1: 1H FY 2020 Half Year Results Presentation to 31 March 2020
Select Click to Harvests edit Master Limited (ASX:SHV) title style 1H FY 2020 Half Year Results Presentation to 31 March 2020 22 May 2020 Click to edit Master text styles 1
Slide 2: Disclaimer & Basis of Preparation
Disclaimer & Basis of Preparation Click to edit Master title style 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: 1H FY 2020 Financial Overview
1H FY 2020 Financial Overview Click to edit Master title style NPAT EBITDA1 Operating Cashflow ($32.2m) $17.4m $34.5m ↓$17.8m - FY2019 Tax payment and AASB ↓$2.7m ↓$4.0m reporting change - Delayed shipments due to COVID-19 Net Debt/Equity (excl. Half Year ROCE EPS Leases) 17.6% 18.1 cps - $70.4m Ban
Slide 4: 1H FY 2020 Business Overview
1H FY 2020 Business Overview Click to edit Master title style Almond Volume Almond Price Almond Division EBIT 22,600 MT $8.20/kg $28.1m Flat ↓4.7% ↓10.8% - Maintained better than - Over 70% of the 2020 crop is - Decreased almond pricing industry standard yields contracted for sale - Increased hortic
Slide 5: Movement in SHV Group EBIT ($M) – Based on movement of crop
Movement in SHV Group EBIT ($M) – Based on movement of Click 2019 andto2020 editcrop Master title style profitability Lower margins across consumer and industrial 50% of 2019 50% of variances Slower hull sales Increased people Crop 2H 2019 between 2019 (weather) and investment, yield and price and 2
Slide 6: Impact on 1H FY 2020 financial statements from AASB16
Impact on 1H FY 2020 financial statements from AASB16 Click to edit Master title style $'000 Operating expenses Decrease 1,549 Depreciation Increase (1,019) EBIT impact Increase 530 Interest expense Increase (302) Profit before tax Increase 228 Right of use assets Increase 239,121 Lease liability In
Slide 7: Income Statement
Income Statement Click to edit Master title style Income Statement Consistent 1H 2020 Profit Result Delivered $ millions 1H FY 2019 1H FY 2020 Variance % Almond Volumes MT 20,750 22,600 1,850 8.9% Decreased revenue reflects delays in receipts due to COVID- Almond Price Per Kg 8.50 8.20 (0.30) (3.5
Slide 8: Balance Sheet
Balance Sheet Click to edit Master title style Half Year Ending Balance Sheet Solid Balance Sheet In Place $ millions 1H FY 2019 1H FY 2020 Increased current assets – working capital of $184.0m is higher Current Assets excl. Cash 187.8 212.1 due to value of 2020 growing crop (inventory) – will red
Slide 9: Cash Flow
Cash Flow Click to edit Master title style Cash Flow Cashflows Driven By Performance $ millions 1H FY 2019 1H FY 2020 Reduction in EBITDA1 to $34.5m – lower almond price and higher cost of water EBITDA 38.5 34.5 Change in Working Capital (48.0) (42.4) Tax Paid (2.8) (16.8) Tax payment – based on
Slide 10: Almond Division
Click to edit Master title style Almond Division Almond Division Wemen Farm – October 2015 Click to edit Master text styles 10 1010
Slide 11: 1H FY 2020 Almond Division Overview
1H FY 2020 Almond Division Overview Click to edit Master title style Almond EBIT Almond Volume Almond Price 22,600 MT $8.20/kg $28.1m Flat ↓4.7% - Good growing conditions – ↓$3.4m disrupted harvest - AUD/USD hedged below 67c - COVID-19 impacting global - Good quality supply chains - Yields above 1.3
Slide 12: Volume Growth
Volume Growth Click to edit Master title style Select Harvests is now consistently yielding over 1.35 tonnes per acre – this adds considerable value in future years ̶ The almond crop is bi-ennial in nature with +/- 10% per annum variation in tonnage possible Wemen Farm – October 2015 Click to editOu
Slide 13: Almond Division Outlook
Almond Division Outlook Click to edit Master title style 2021 Crop Sales Horticulture - Frost fan investment complete - Trees in good health going into - Shipments delayed - Continued focus on orchard dormant period - Inshell and kernel programs hygiene to improve quality - Bud health positive both
Slide 14: Almond Crop Update
Almond Crop Update Click to edit Master title style Almond Board of California August – April 2020 Position Report Crop Receipts 2.53B lb Up 11.9% vs LY Total Supply (including Carry-over) 2.80 lb Up 8.6% vs LY Shipments 1.86B lb Up 5.5% vs LY • Domestic 0.59B lb Up 6.4% vs LY • Exports 1.27B lb Up
Slide 15: Food Division
Click to edit Master title style Food Division Wemen Farm – October 2015 Click to edit Master text styles 15 1515
Slide 16: 1H 2020 Food Division and Corporate Overview
1H 2020 Food Division and Corporate Overview Click to edit Master title style Food Division EBIT Industrial Sales Consumer Sales - Continuing strong demand for - Consumer sales were higher value added product than 1H FY2019 however domestically and export $1.7m - Parboil value adding facility weight
Slide 17: Food Division and Corporate Outlook
Food Division and Corporate Outlook Click to edit Master title style Industrial Sales Lucky Sunsol - Extensive marketing campaign - Expected rebound in demand about to commence globally and domestically as - New packaging developed and - Increased ranging in Coles and food services industry re- on s
Slide 18: Build Brand Awareness for Sunsol
BUILD BRAND AWARENESS FOR SUNSOL Targeted, high reaching media intercepts customers in their daily lives Television TRIGGER INTEREST IN PROBIOTIC RANGE Communicate Sunsol product benefits & value OOH Aid enquiry throughout accessible information DRIVE ONGOING SALES Social Tactical path to purchase D
Slide 19: Strategy and 2020 Priorities
Click to edit Master title style Strategy and 2020 Priorities Wemen Farm – October 2015 Click to edit Master text styles Bunargool Orchard Blossom 2018 19 1919
Slide 20: Select Harvests – in control of our destiny
Select Harvests – in control of our destiny Click to edit Master title style Vision To be a Leader in the Supply of Better for You Plant Based Foods Trust & Respect Integrity & Diversity Sustainability Performance Innovation Values Treat all stakeholders with trust and respect All decisions and tran
Slide 21: Vertically Integrated from 'Paddock to Plate'
Vertically Integrated from ‘Paddock to Plate’ Click to edit Master title style Primary Orchards → Production → Processing ■ 7,696 planted hectares of ■ Responsible for farm ■ Single site facility responsible for almond orchards management across all our the primary processing of our ■ Combination of
Slide 22: 2H FY2020 Top Priorities
2H FY2020 Top 10 Priorities Click to edit Master title style 1. Complete 2020 crop sales program – Manage current shipments and contracts to export markets 2. Process, pack and ship 2020 crop – New capital investment leading to improved rates and quality 3. Manage Cash Position - Maximise working ca
Slide 23: 2H FY2020 Outlook
2H FY2020 Outlook Click to edit Master title style - Almond pricing should stabilise once US harvest commences in August 2020 - 2H FY 2020 hull volume sales will increase as inventory becomes available through the processing of the 2020 crop - External processing contracts will be completed and cont
Slide 24: Thank you
Click to edit Master title style Thank you Please direct any queries to: Paul Thompson Brad Crump Andrew Angus Managing Director Chief Financial Officer and Company Secretary Investor Relations +61 3 9474 3544 +61 3 9474 3544 +61 402 823 757 Please note that background material/data regarding the gl
Slide 25: Almond Orchards – Our productive foundation
Almond Orchards – Our productive foundation Click to edit Master title style 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. E
Slide 26: Select Harvests – Orchard Profile
Select Harvests – Orchard Profile Click to edit Master title style Select Harvests Total Planted Almond orchard portfolio (as at 31 March 2020) Acres Hectares Central Region Company Owned 4,183 1,693 Leased 3,422 1,385 Total 7,605 3,078 Northern Region Company Owned 1,797 727 Leased 3,017 1,221 Tota
Slide 27: Select Harvests – Orchard Age Profile
Select Harvests – Orchard Age Profile Click to edit Master title style Wemen Farm – October 2015 Growth Click to edit Master and improvement text styles has occurred in SHV orchard portfolio in recent years - acquisition, replants, greenfields 27 2727
Slide 28: Targeting an Above Average Yield Per Acre @ Maturity
Targeting an Above Average Yield Per Acre @ Maturity Click to edit Master title style Harvest Volume (tonnes) per acre Harvest Volume (tonnes) per acre based on 1.35 Tonnes per Acre at Year based on 1.2 Tonnes per Acre @ Maturity & Immature Yields at 2019 Maturity Levels 1 0.0 0.0 2 0.0 0.0 3 0.3 0.
Slide 29: Tree Nut Pricing
Tree Nut Pricing Click to edit Master title style Commodity Price Trend 2009 – 2020 – AUD$/KG CFR A$/Kg Wemen Farm – October 2015 Click to edit Master text styles Almond pricing has reduced due to Covid-19 supply chain restrictions and a large subjective 2020 US crop 29 2929
Slide 30: Australian Almond Export Sales
Australian Almond Export Sales Click to edit Master title style Source: Australian Almond Board Wemen Farm – October 2015 Click to edit Master The text globalstyles demand for Australian almonds remains strong 30 3030
Slide 31: Growing costs increase - reflecting the maturity profile of trees
Growing costs increase - reflecting the maturity profile of trees and theto Click increased cost of title edit Master waterstyle for the 2020 crop Growing Costs Breakdown By % of Total Growing Costs 35% - Total Growing Costs up 19.2% - Water costs up 75.4% 30% - Growing Costs (excl. Water) up 5.2% -
Slide 32: Useful Almond Industry websites
Useful Almond Industry websites Click to edit Master title style Industry Associations Californian Almond Board www.almondboard.com Almond Board of Australia www.australianalmonds.com.au Industry Reports US Crop Forecasts (Subjective, Objective) http://www.almonds.com/growers/resources/crop-fo