Seeka Limited — Annual Report 2016

Feb 27, 2017

Analyst Briefing Pack

FY 2016

==> picture [95 x 54] intentionally omitted <==

==> picture [43 x 54] intentionally omitted <==

Integrated orchard-to-market service

An international business founded in local New Zealand

==> picture [15 x 15] intentionally omitted <==

==> picture [13 x 15] intentionally omitted <==

Grow, handle and market

▪ Kiwifruit ▪ Nashi pears ▪ European pears ▪ Other produce > Apricots > Plums > Cherries

==> picture [13 x 15] intentionally omitted <==

==> picture [13 x 15] intentionally omitted <==

==> picture [13 x 16] intentionally omitted <==

==> picture [13 x 15] intentionally omitted <==

Grow, handle and market

▪ Kiwifruit ▪ Avocado ▪ Kiwiberry Manufacture and retail ▪ Kiwi Crush, Kiwi Crushies ▪ Avocado oil ▪ Kiwifruit pollen Import, ripen and supply ▪ Bananas ▪ Pineapple, Papaya Wholesale

==> picture [16 x 16] intentionally omitted <==

▪ Seasonal produce

2 Seeka Analyst Briefing Pack | February 2017

Our business model

Founded on relationships

==> picture [14 x 17] intentionally omitted <==

Large international shareholders

▪ Farmind Corporation of Japan

▪ Sumifru of Singapore

==> picture [14 x 17] intentionally omitted <==

==> picture [14 x 17] intentionally omitted <==

Te Awanui Huka Pak is our largest New Zealand shareholder Nearly all supplying New Zealand kiwifruit growers are shareholders

==> picture [14 x 17] intentionally omitted <==

Many employees are shareholders

▪ 4% of company shares owned by the employee share scheme

3 Seeka Analyst Briefing Pack | February 2017

Our strategy

New Zealand’s “Premier Produce Business”

Sustainable and profitable growth

Focus on core strengths

• Integrated from orchard to market

• Kiwifruit business – the platform

• Deliver value to stakeholders

Value accretive acquisitions

• Build on core strengths

• Pursue vertically integrated opportunities

• Extend geographical and produce spread

Target $300m market capitalisation

• Our growth aspiration

==> picture [318 x 157] intentionally omitted <==

==> picture [121 x 188] intentionally omitted <==

4 Seeka Analyst Briefing Pack | February 2017

Group financial summary

Audited financial results

==> picture [347 x 362] intentionally omitted <==

----- Start of picture text -----

$Millions 2016 2015
Turnover [1] 226.9 184.7
Revenue 191.3 142.1
EBITDA [2] 24.8 13.9
Net profit before tax 13.6 5.2
NPAT 10.4 4.3
Turnover [1] & Revenue EBITDA
$Millions 226.9 $Millions 24.8
184.7
191.3
148.6 21.2 EBITDA
13.9 excluding
142.1 insurance
11.3
115.7
2014 2015 2016 2014 2015 2016
----- End of picture text -----

$10.4m NPAT

==> picture [11 x 13] intentionally omitted <==

• Up 143%

• Driven by record New Zealand kiwifruit volumes and insurance settlement

$191m revenue

==> picture [11 x 13] intentionally omitted <==

• Up 35%

• $25m EBITDA ▪ Up 78%

==> picture [11 x 13] intentionally omitted <==

• 65 cents EPS ▪ Up 124%

• ▪ 18 cents related to 2015 insurance claim

==> picture [11 x 13] intentionally omitted <==

20 cents dividend ▪ Related to FY2016 2014 1. Turnover is revenue plus the value of sales Seeka makes as an agent. 5 Seeka 2. EBITDA is earnings before interest, tax, depreciation, amortisation, impairments and revaluations.Analyst Briefing Pack | February 2017

Seeka financial performance

Revenue and packed kiwifruit volumes

==> picture [700 x 375] intentionally omitted <==

----- Start of picture text -----

$191 m
Revenue $139 m $142 m
$116 m 33.0m Australia
$108 m
Total kiwifruit 27.1m $97 m 27.8m Class 2
trays packed 7.5m Gold
21.8m 21.4m 4.4m
6.3m 19.6m
3.5m 1.8m
0.8m
32.4m
New Zealand
19.4m 17.2m 17.8m 18.3m 22.1m 23.5m Green
2011 2012 2013 2014 2015 2016
----- End of picture text -----

6 Seeka Analyst Briefing Pack | February 2017

Seeka financial performance

Lift in net profit after tax and earnings per share

==> picture [547 x 367] intentionally omitted <==

----- Start of picture text -----

$0.65
$0.47
Earnings
$0.41
per share
$10.4m
$0.29
$0.22
Net profit $5.9m $0.19
after tax
$4.3m
$3.2m
$2.3m
2012 2013 2014 2015 2016
----- End of picture text -----

7 Seeka Analyst Briefing Pack | February 2017

Earnings accelerating on revenues

Earnings increasing faster than revenue growth

==> picture [677 x 371] intentionally omitted <==

----- Start of picture text -----

$0.65
Normalised EPS excludes
$0.47 2016 insurance settlement
Earnings
$0.41
per share
+62 [%]
$0.29
+35 [%]
$0.22
$0.19
Revenue $108m $97m $116m $142m $191m
2012 2013 2014 2015 2016
----- End of picture text -----

8 Seeka Analyst Briefing Pack | February 2017

Normalised EBITDA

Up 46%

==> picture [647 x 399] intentionally omitted <==

----- Start of picture text -----

$4.1m insurance proceeds $Millions 2016 2015
from Oakside fire EBITDA [2] 24.8 13.9
▪
$3.6m fruit loss mitigation
Add back
settlement Australian acquisition costs - 1.1
and stamp duty
▪
$0.5m fire insurance
Grower relationship - 4.0
payment [1]
$2.9m cost of grower share Grower share scheme 2.9 2.5
scheme
Deduct
▪
Last year of 3-year scheme
Insurance proceeds 4.1 5.5
Gain on sale of investments 0.4 0.1
Normalised EBITDA [3] 23.2 15.9
1.In 2015 Seeka and its growers suffered extraordinary fruit loss as a result of the Oakside fire. The associated financial loss was subject to an insurance claim
settled 2016. In 2015 Seeka advanced $4.0m to growers to maintain goodwill. This advance was substantially recovered by insurance proceeds.
2.EBITDA is earnings before interest, tax, depreciation, amortisation, impairments and revaluations.
3.Normalised EBITDA removes both extraordinary and short-term gains and losses from Group EBITDA, such as the 3-year grower share scheme.
----- End of picture text -----

9 Seeka Analyst Briefing Pack | February 2017

Earnings, net debt and net asset backing

Earnings up 124%

==> picture [13 x 15] intentionally omitted <==

==> picture [13 x 15] intentionally omitted <==

==> picture [13 x 15] intentionally omitted <==

==> picture [13 x 15] intentionally omitted <==

==> picture [631 x 384] intentionally omitted <==

----- Start of picture text -----

65 cents basic EPS 2016 2015
Earning per share (cents) 65 29
▪
Up 124%
Net debt ($m) 72.8 53.0
47 cents normalised EPS
Total assets ($m) 197.3 164.3
$73m net debt – up $20m Net asset backing per share $ 4.88 $ 4.34
▪
Investing in growth
Earnings per share
▪ Cents 65
$34m NZ post harvest
infrastructure
▪
$6m NZ strategic property 47
▪ $3m Australian orchards 29 Normalised EPS excludes 2016 receipt of $3.6m
22 insurance proceeds
and infrastructure
$197m total assets
2014 2015 2016
----- End of picture text -----

10 Seeka Analyst Briefing Pack | February 2017

Operating cash flow

Investing in new Australian business

==> picture [13 x 15] intentionally omitted <==

==> picture [13 x 15] intentionally omitted <==

==> picture [578 x 384] intentionally omitted <==

----- Start of picture text -----

$21.3m operating cash $Millions 2016 2015
flow Operating cash flow 21.3 1.8
$17.7m normalised Add back
Australian acquisition costs - 0.6
operating cash flow
Grower relationship - 4.0
▪ payment [1]
Up 177%
Deduct
Insurance proceeds [1] 3.6 -
Normalised cash flow 17.7 6.4
1. Seeka and its growers suffered extraordinary fruit loss as a result of the
Oakside fire. The associated financial loss was subject to an insurance claim
that was resolved in 2016. In order to protect Seeka's growers from the
claim’s impact on income and cash flow, and to maintain goodwill, Seeka
paid them $4.04m ahead of the insurance outcome. This was expensed in
2015, with the claim payment of $3.63m recorded as income in 2016.
----- End of picture text -----

11 Seeka Analyst Briefing Pack | February 2017

==> picture [721 x 271] intentionally omitted <==

Key operating segments

Orcharding Post Harvest Retail Services Seeka Australia

New Zealand orcharding

Volume and market returns

==> picture [13 x 15] intentionally omitted <==

==> picture [13 x 16] intentionally omitted <==

==> picture [13 x 16] intentionally omitted <==

Exceptional Green yields ▪ Impacted Green tray returns Continued growth in Gold ▪ SunGold volumes recovering from Psa $5.6m EBITDA ▪ Up 42%

==> picture [313 x 392] intentionally omitted <==

----- Start of picture text -----

2016 2015
Millions of trays
Green cultivars (Hayward) 8.9 8.0
Gold cultivars 2.3 1.2
Total 11.2 9.2
Turnover / Revenue ( $m ) 47.9 42.3
EBITDA ( $m ) 5.6 4.0
New Zealand kiwifruit grown
Millions of class 1 trays
11.1 Total
9.2
2.3 Gold
7.4 6.9 7.2
1.2
1.2 0.1
0.4
8.8
8.0
6.2 6.8 6.8 Green
2012 2013 2014 2015 2016
----- End of picture text -----

13 Seeka Analyst Briefing Pack | February 2017

New Zealand post harvest

Volume and profit increases

32.4m trays handled ▪ Up 17% $26.8m EBITDA

Includes $2.9m cost of grower share scheme (2015: $2.5m) ▪ Last year of share scheme

Includes $3.6m insurance proceeds

==> picture [309 x 380] intentionally omitted <==

----- Start of picture text -----

2016 2015
Millions of trays
Green cultivars packed 25.0 23.4
Gold cultivars packed 7.4 4.4
Total trays 32.4 27.8
Turnover / Revenue ( $m ) 110.8 88.3
EBITDA ( $m ) 26.8 13.3
Class 1 & 2 kiwifruit trays
32.4
Millions
27.8
21.8 21.4
19.6
2011 2012 2013 2014 2015
----- End of picture text -----

14 Seeka Analyst Briefing Pack | February 2017

New Zealand retail services

Flat earnings

$1.9m EBITDA

Avocado export revenue up on volumes and market returns

$ millions	December 2015	December 2014
Turnover	53.7	52.2
Revenue	16.8	9.6
EBITDA	1.9	1.7

Kiwifruit export revenue down on market returns

15 Seeka Analyst Briefing Pack | February 2017

Seeka Australia

Integrated orchard to market

==> picture [13 x 15] intentionally omitted <==

==> picture [13 x 15] intentionally omitted <==

==> picture [13 x 15] intentionally omitted <==

==> picture [13 x 16] intentionally omitted <==

==> picture [13 x 16] intentionally omitted <==

First year of full operations	Tonnes	2016	2015
$1.0m EBITDA	Kiwifruit (tonnes)	1,915	-
	Nash pears (tonnes)	1,432	-
$3.3m invested in growth	Revenue ( $m )	15.2	1.2
▪New packhouse and	EBITDA ( $m )	1.0	( 1.4)
coolstore
▪Upgrading orchards	Seeka is largest grower and supplier of Australian kiwifruit and nashi pears
Business integrated into	> Own the orchards, pack, market and distribute all the produce throughout Australia
Seeka systems	> Also grow European pears, apricots, plums & cherries
Fully funded by bank debt

16 Seeka Analyst Briefing Pack | February 2017

Dividend announcement

10 cents per share to be paid 24 March 2017

==> picture [13 x 15] intentionally omitted <==

==> picture [13 x 16] intentionally omitted <==

==> picture [13 x 16] intentionally omitted <==

==> picture [551 x 390] intentionally omitted <==

----- Start of picture text -----

Cents per share
10 cents per share
10 10 10
▪
Fully imputed
9
▪
Payment date: 24 March 8 8
▪
Record date: 17 March
Dividend reinvestment plan
applies
20 cents per share fully
imputed dividend relating to
the 2016 financial year
Nov 14 Mar 15 Sep 15 Mar 16 Sep 16 Mar 17
2014 2015 2016
----- End of picture text -----

17 Seeka Analyst Briefing Pack | February 2017

Share price

84% total shareholder return over 2-year period $1.90 lift in price + 37 cents paid in dividends

==> picture [677 x 341] intentionally omitted <==

----- Start of picture text -----

Announce Australian acquisition
8 cents dividend 9 cents dividend 10 cents dividend 10 cents dividend 10 cents
on 24 March
$4.75
$4.60
$4.50
$4.25
$4.00
$3.75
$3.50
$3.25
$3.00
$2.70 $2.75
$2.50
1 Feb 1 May 1 Aug 1 Nov 1 Feb 1 May 1 Aug 1 Nov 1 Feb
----- End of picture text -----

18 Seeka Analyst Briefing Pack | February 2017

Capital expenditure – cash flow

Expanding New Zealand infrastructure to support growth

$40.9m capex

▪ $24.5m coolstore and packing infrastructure ▪ $6.0m land for head office and future post harvest site

▪ $2.4m plastic bins ▪ $3.3m Australian orchards and post harvest ▪ $4.7m upgrades for 2017

2017 further investment

▪ New packing machine ▪ Coolstore expansions

==> picture [298 x 351] intentionally omitted <==

----- Start of picture text -----

$Millions 2016 2015
Purchase of property, plant
40.9 16.4
and equipment
Capital expenditure
$Millions
40.9
16.4
5.6
1.0 1.6
2012 2013 2014 2015 2016
----- End of picture text -----

19 Seeka Analyst Briefing Pack | February 2017

Welcome to Seeka

==> picture [95 x 54] intentionally omitted <==

==> picture [43 x 54] intentionally omitted <==

Seeka share performance

Outperforming NZX top 50 fund

==> picture [657 x 265] intentionally omitted <==

21 Seeka Analyst Briefing Pack | February 2017