Seeka Limited — Interim / Quarterly Report 2021

Oct 26, 2021

==> picture [88 x 57] intentionally omitted <==

Stakeholder Update October 2021

Agenda

1

Chair’s introduction

• Board update

• Six month financial summary

• Earnings per share and dividend

• Bank debt

• Trends in financial performance and strategy

• 2021 full year guidance

2

Chief Executive’s report

• Safety

• Six month highlights and segment performance

• Business growth

• Agritech and Sustainability

Questions 3

==> picture [960 x 15] intentionally omitted <==

2

Board Appointment

==> picture [50 x 32] intentionally omitted <==

==> picture [246 x 308] intentionally omitted <==

Robert Farron appointed independent director

• −Chartered Accountant

• −Based in the Bay of Plenty

• −Extensive management experience in NZ and Australia

• −Former Trustpower CFO and Tilt Renewables CEO

Appointment part of Board succession planning

• −Reverting to 7 directors at 2022 ASM

==> picture [960 x 15] intentionally omitted <==

3

Seeka’s financial performance

==> picture [50 x 32] intentionally omitted <==

For the first six months of 2021, unaudited

$224.5m revenue

Up 26% on previous corresponding period (pcp)

$46.9m EBITDA

Up 54% on pcp

$30.8m Net profit before tax

Up 77% on pcp

$20.6m Net profit after tax

Up 12% on pcp (pcp included $5.6m deferred tax credit)

	H1 FY21	H1 FY20		FY20
$ millions	Unaudited	Unaudited	Growth	Audited
Revenue	224.5	178.7	26%	251.5
Cost of sales	146.1	124.5	17%	200.0
Increase / (reduction) in fair value of biological assets – crop	(18.2)	(16.4)		1.2
Gross profit	60.1	37.7	59%	52.7
EBITDA	46.9	30.4	54%	42.9
EBIT	34.7	21.4	62%	24.3
Net profit before tax	30.8	17.4	77%	16.3
Net profit after tax	20.6	18.4	12%	15.2

==> picture [960 x 15] intentionally omitted <==

All results and comparatives consistent with NZ IFRS 16 Leases.

4

Earnings per share and dividend

==> picture [50 x 32] intentionally omitted <==

Earnings per share

65 cents earnings per share[1]

• −57 cents in pcp – up 14%

• $5.92 net assets per share – up 9%

−$5.44 net tangible assets per share – up 6%

−$13.16 total assets per share

Dividend

	H1 FY21	H1 FY20		FY20
	Unaudited	Unaudited	Growth	Audited
Net profit ($m)	$ 20.6 m	$ 18.4 m	12%	$ 15.2 m
Weighted shares on issue (m)	31.8 m	32.1 m		29.4 m
Earnings per share	$ 0.65	$ 0.57	14%	$ 0.52
Net tangible assets	$ 214.7 m	$ 164.7 m	30%	$ 167.4 m
Net tangible assets per share	$ 5.44	$ 5.13	6%	$ 5.20
Net assets per share	$ 5.92	$ 5.41	9%	$ 5.47
Total assets per share	$ 13.16	$ 12.96	2%	$ 11.66

13 cents per share dividend paid 13 October 2021

==> picture [960 x 15] intentionally omitted <==

1. As required by NZ IAS 33, 2,748,877 shares held by Seeka Trustee Limited for the Grower Loyalty and Employee Share Schemes are excluded from EPS calculations.

5

Balance sheet

==> picture [50 x 32] intentionally omitted <==

Bank debt

$127.8m net interest bearing debt – down $1.5m on pcp

• −Includes $21.9m of OPAC debt taken on acquisition

• −$23.0m of seasonal advances to Seeka Growers; since repaid

• $3.8m of Northland orchard assets held for sale at 30 June

• −$2.5m since sold

$8.3m raised by grower loyalty share scheme September 2021

−1.9m shares vested

• −145k shares remain for avocado growers; vesting April 2022

• $518.9m total assets – up 25% on pcp

• $95.6m net debt 30 September 2021

−$92.8m at September 2020

Net bank debt

==> picture [295 x 324] intentionally omitted <==

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

$129.3m
$127.8m
$21.1m
Grower $23.0m
advances Grower
advances
$95.6m
$21.9m
OPAC debt
$77.9m
Jun 2020 Dec 2020 Jun 2021 Sep 2021
----- End of picture text -----

==> picture [960 x 15] intentionally omitted <==

6

Trends in financial performance

==> picture [50 x 32] intentionally omitted <==

Growing EBITDA and total assets

82% increase in EBITDA in three years

• −22% cumulative annual growth rate (CAGR) in the three years since June 2018

121% increase in NPAT in three years

• −30% CAGR since June 2018

• −61% increase on June 2020 base NPAT (excludes $5.6m deferred tax gain)

67% increase in total assets in three years

• −19% CAGR since June 2018

Core business has lifted in 2021

• −Focus on further improvements

==> picture [552 x 332] intentionally omitted <==

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

EBITDA NPAT Total assets
22% CAGR 30% CAGR 19% CAGR
$46.9m $20.6m $519m
$18.4m
$406m [$416m ]
$30.4m
$27.9m $311m
$11.9m
$25.7m
$9.3m
H1FY18 H1FY19 H1FY20 H1FY21 H1FY18 H1FY19 H1FY20 H1FY21 H1FY18 H1FY19 H1FY20 H1FY21
$5.6 tax gain
$12.8m base NPAT
----- End of picture text -----

==> picture [960 x 15] intentionally omitted <==

All results and comparatives consistent with NZ IFRS 16 Leases.

7

Seeka’s enterprise value growth

==> picture [50 x 32] intentionally omitted <==

Enterprise value = Market capitalisation + Bank debt

==> picture [907 x 401] intentionally omitted <==

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

June 2021
27% cumulative annual growth
rate since December 2012
$329m Enterprise value
$28m repaid
from Australian
orchard sales $301m September 2021
December
Bank debt
2012
Market capitalisation
$31m
Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17 Dec 18 Dec 19 Dec 20
----- End of picture text -----

==> picture [960 x 15] intentionally omitted <==

8

Seeka annual total shareholder returns

==> picture [50 x 32] intentionally omitted <==

On opening share price since 1 January 2010

==> picture [259 x 52] intentionally omitted <==

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

Psa impacted Price
share price recovery
----- End of picture text -----

==> picture [354 x 54] intentionally omitted <==

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

Rights issue 9% return under 15% return to
impacted share price Covid-19 October 2021
----- End of picture text -----

==> picture [859 x 353] intentionally omitted <==

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

Annual total return = gross dividend + change in share price
----- End of picture text -----

==> picture [960 x 15] intentionally omitted <==

9

Seeka’s strategy

==> picture [50 x 32] intentionally omitted <==

Orchard to market excellence

Clear focus on enacting strategy, and building a sustainable business

Operational excellence following disciplined planning and execution

Innovation and automation to improve productivity

Transacting acquisitions that are consistent with strategy, and accretive to shareholders, lifting returns on capital employed – bigger and more diverse

Adapting to our changing environment with commercial innovation

Providing customers with excellent service and quality fruit

Being the company where people want to work, and know they will be safe

==> picture [960 x 15] intentionally omitted <==

10

FY21 full year operational guidance – October update Updated 2021 guidance

==> picture [50 x 32] intentionally omitted <==

Forecasting full-year net profit before tax between $15m and $17m

• −Increase on August guidance

Includes

• −$1.4m of restructuring and acquisition costs

Excludes

• −Any one-off gains or extraordinary items (should they settle in the year)

• −OPAC profit to the purchase date totalling $1.8m (NPBT)

FY21 Guidance $ millions Lower range	FY21 FY20 Guidance Full year Upper range Actuals
Netprofit before tax 15.0	17.0 16.3
Change on FY20 ( 8%)	4%
NPBT with claim settlement 22.0	24.0 16.3
Change on FY20 35%	47%

Guidance with kiwifruit claim settlement

• Kiwifruit claim now settled

Noting that

• −$9m of pcp NPBT was from gain on orchard asset sales

• High Court to approve settlement distribution

Substantial improvement in operational earnings

• If distribution occurs this year, then NPBT guidance is $22m to $24m

==> picture [960 x 15] intentionally omitted <==

11

==> picture [50 x 32] intentionally omitted <==

Chief Executive’s report Michael Franks

==> picture [960 x 15] intentionally omitted <==

Safety

==> picture [50 x 32] intentionally omitted <==

No serious harms in 2021

2021 health and safety	Year to date	Targets
Lag performance measures Total recordable injury frequency Serious injuries1		< 4.5 0
	3.6
	0
Lead performance measure Inspirational People H&S meetings between March and November		90%
	92%

Covid-19 continues to be dynamic But our processes are working well

==> picture [389 x 291] intentionally omitted <==

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

Serious harm 0 3
Lost time injuries 40 51
Medical 29 40
First Aid 75 101
No Treatment 131 87
Total 275 282
2021 to date 2020
----- End of picture text -----

==> picture [960 x 15] intentionally omitted <==

13

1. Permanently disabled or requiring immediate in-patient hospitalisation

Six months highlights to June 2021

==> picture [35 x 35] intentionally omitted <==

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

1
----- End of picture text -----

Record six-month profit

• −Significant improvement in operating profit

2

• OPAC investment completed

• −8m tray kiwifruit business

• −Expands service delivery to Ōpōtiki, East Cape & Gisborne

3

• $128m interest bearing debt, down $1.5m on pcp

−After assuming $21.9m OPAC debt

4

• $519m total assets, up 25% on pcp

• −$304m property, plant and equipment, up 35%

==> picture [35 x 35] intentionally omitted <==

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

5
----- End of picture text -----

• Sustainability programme sets carbon footprint baseline

• e

• −Calculating current year CO2

• e

• −Initiatives underway to reduce CO2

==> picture [380 x 540] intentionally omitted <==

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

14
----- End of picture text -----

Orchard operations

==> picture [50 x 32] intentionally omitted <==

Growing kiwifruit, avocado and kiwiberry for New Zealand orchard owners

Record orchard revenue of $53.7m

• −Up 13% on pcp

$5.7m EBITDA

• −Up 36% on pcp

Volume will increase in 2022

• −OPAC

• −Orangewood

	H1 FY21	H1 FY20		FY20
$ millions	Unaudited	Unaudited	Growth	Audited
Revenue	53.7	47.4	13%	75.7
EBITDA	5.7	4.2	36%	5.4
EBIT	4.7	3.3	41%	3.5
Segment assets	92.8	78.9	18%	63.4
Crop grown
Total kiwifruit trays grown - Seeka	14.4	13.0	11%
SunGold class 1 trays (m)	5.5	5.1	8%
Hayward & other class 1 trays (m)	8.9	7.9	13%
Avocado grown (million kgs)1	1.4	1.6	( 14%)
Kiwiberry grown (million kgs)	0.14	0.17	( 19%)

1. Avocado volumes are for crop harvested in the 2020/21 season (pcp: 2019/20 season).

==> picture [960 x 15] intentionally omitted <==

15

Post harvest operations

==> picture [50 x 32] intentionally omitted <==

Packing, coolstoring and shipping kiwifruit, avocado and kiwiberry for New Zealand orchard owners

Record post harvest revenue of $145.2m

• −Up 34% on pcp

$49.1m EBITDA

• −Up 62% on pcp

Volume will increase in 2022

• −8m trays from OPAC investment

• −2m trays from Orangewood investment

• −New SunGold plantings and cutovers

	H1 FY21	H1 FY20		FY20
$ millions	Unaudited	Unaudited	Growth	Audited
Revenue	145.2	108.1	34%	140.1
EBITDA	49.1	30.3	62%	41.9
EBIT	40.8	24.2	69%	29.8
Segment assets	337.9	244.7	38%	232.7
Trays packed
Total kiwifruit trays packed – Seeka	36.8	33.4	10%
SunGold (class 1)	17.9	16.1	11%
Hayward (class 1)	17.2	15.7	10%
Other fruit - includes class 2	1.7	1.6	2%
Avocado packed (1000s of trays)	262	165	59%
Kiwiberry packed (1000s of trays)	88	82	7%

==> picture [960 x 15] intentionally omitted <==

16

SeekaFresh retail services operations

==> picture [50 x 32] intentionally omitted <==

Supply, export and sales of avocado, kiwiberry and class 2 kiwifruit, import fruit, and Kiwi Crush production

$11.5m Revenue – up 18% on pcp

• −Strong close to 2020/21 avocado season

• $1.9m EBITDA – up 45% on pcp

Business continues to grow

• −High-quality produce

• −Increasing local market volumes

• −Building strong customer relationships

Working to optimise 2021/22 avocado grower returns

• −Record low values in Australia from bumper crop

• −Targeting more sales to Asia and NZ retailers

• −Social media promotions underway

	H1 FY21	H1 FY20		FY20
$ millions	Unaudited	Unaudited	Growth	Audited
Revenue	11.5	9.7	18%	21.8
EBITDA	1.9	1.3	45%	3.0
EBIT	1.4	0.9	54%	2.2
Segment assets	19.2	18.2	5%	12.4

==> picture [222 x 220] intentionally omitted <==

==> picture [233 x 220] intentionally omitted <==

==> picture [960 x 15] intentionally omitted <==

17

Australian operations

==> picture [50 x 32] intentionally omitted <==

Growing, packing and retailing kiwifruit and other Australian produce on owned and leased orchards

$13.86m Revenue – up 4% on pcp

−Ongoing labour and market disruption from Covid-19

$2.73m EBITDA – up 44% on pcp

• −Excellent result in difficult circumstances

• −New packing technology lifts efficiency

$1.39m EBIT after lease costs – up 2% on pcp

	H1 FY21	H1 FY20		FY20
$ millions	Unaudited	Unaudited	Growth	Audited
Revenue	13.86	13.30	4%	13.07
EBITDA	2.73	1.89	44%	7.44
EBIT	1.89	1.37	38%	6.27
EBIT after lease costs	1.39	1.37	2%	6.19
Segment assets	50.0	55.5	( 10%)	47.2
Kiwifruit (tonnes)	2,115	2,153	( 2%)
Nashi (tonnes)	873	791	10%
Pears (tonnes)	1,861	1,340	39%
Other fruit (tonnes)	121	96	26%
Total tonnes grown, packed and sold	4,970	4,380	13%

==> picture [960 x 15] intentionally omitted <==

18

==> picture [50 x 32] intentionally omitted <==

GROWTH 2021

==> picture [960 x 15] intentionally omitted <==

19

OPAC integration

Servicing Ōpōtiki, East Cape & Gisborne

Premium kiwifruit operation in Ōpōtiki

• −8m tray kiwifruit operation

• −Modern post harvest infrastructure

• −Strong growth region reaching the East Cape & Gisborne

==> picture [102 x 91] intentionally omitted <==

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

Ōpōtiki
----- End of picture text -----

==> picture [180 x 136] intentionally omitted <==

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

To East Cape orchards
Ōpōtiki orchards
----- End of picture text -----

• $61m investment made May 2021

• −$39m equity + $22m debt

• $9m EBITDA contribution FY22[1]

Business now integrated

• −Performing ahead of forecast

• −Solid foundation to build service delivery

==> picture [196 x 167] intentionally omitted <==

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

Seeka OPAC
To Gisborne orchards
----- End of picture text -----

1. Forecasted EBITDA contribution includes synergies and is reported on a pre NZIFRS16 Leases basis.

20

Orangewood acquisition and integration Premium kiwifruit orcharding and post harvest business located in Kerikeri

==> picture [50 x 32] intentionally omitted <==

Premium kiwifruit and avocado growers in Northland

• −2m tray Kerikeri-based business

• −Strong growth region for SunGold kiwifruit

• −Orangewood required capital to grow capacity

==> picture [447 x 83] intentionally omitted <==

• −Adds new volumes to Seeka’s Kerikeri post harvest facility

$6.5m investment awaiting sign off

• −$4.7m equity and cash + $1.8m debt

• $2m EBITDA contribution FY22[1]

Deal accepted by Orangewood shareholders

• −Working to finalise conditions before year end

• −Working to integrate operations

Awaiting conditions to be satisfied

==> picture [453 x 238] intentionally omitted <==

==> picture [960 x 15] intentionally omitted <==

1. Forecasted EBITDA contribution includes synergies and is reported on a pre NZIFRS16 Leases basis.

21

Our bigger business

==> picture [50 x 32] intentionally omitted <==

2021 acquisitions add volumes and capacity in growth regions

Adds 9.4m trays of new business (2021 volumes)

==> picture [179 x 30] intentionally omitted <==

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

2021 kiwifruit volumes
Class 1 SunGold and Hayward trays
----- End of picture text -----

• −26% growth in core kiwifruit business

==> picture [95 x 105] intentionally omitted <==

Investing in growth regions

• −Orangewood 2m trays with 95% SunGold

• −OPAC 8m trays with 70% SunGold

Orcharding and post harvest operations

• −40% increase in Seeka SunGold volumes

• −Includes Northland avocados

• $1.5m of acquisition and amalgamation costs in 2021

• −Acquisitions occurred after main earning period

• −$54m of new revenue streams forecasted for 2022

==> picture [384 x 325] intentionally omitted <==

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

44.9m
Hayward
SunGold
35.1m
19.5m
13% growth
17.2m
17.9m
25.4m
42% growth
Seeka Seeka with OPAC
& Orangewood
----- End of picture text -----

• −Release material synergies across Seeka’s operations

==> picture [960 x 15] intentionally omitted <==

Packed to 30 June

22

KKP and Transcool upgrades

==> picture [50 x 32] intentionally omitted <==

$20m investment that delivers capacity upgrade for harvests 2022 and 2023

New MAF Roda packline for KPP

• −8 lane with camera grading and automation

• −Labour, volume and speed efficiencies

• −Ready for relocation to the proposed Pukenga facility

• −3[rd] MAF Roda at Seeka; Huka Pak, OPAC, KKP

• −Replaces labour-intensive 10-lane packline

New coolstore at Transcool

• −5-high automated coolstore

• −650k tray static capacity with pre-coolers

• −Balances upgraded packing capacity

• −Hi-efficiency with low operating costs

• −Uses zero-carbon coolant

==> picture [449 x 363] intentionally omitted <==

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

Pukenga
Transcool
Seeka 360
KKP
----- End of picture text -----

Upgrade ready for harvest 2022

Pukenga business case continues

==> picture [960 x 15] intentionally omitted <==

23

==> picture [690 x 291] intentionally omitted <==

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

&
Agritech
Sustainability
----- End of picture text -----

==> picture [50 x 32] intentionally omitted <==

==> picture [960 x 15] intentionally omitted <==

24

Fruitometry digital crop estimation

==> picture [50 x 32] intentionally omitted <==

$2.6m Agritech investment

==> picture [265 x 40] intentionally omitted <==

Advancing into Agritech

• −Driver to improve orchard productivity and post harvest efficiency

Cornerstone shareholding in Fruitometry July 2021

• −$2.6m for 26%

• −Input into technology development

On-orchard digital crop estimation service

• −Artificial intelligence used by Emirates Team NZ

• −Analyse 1000s of images to develop a rich data set

• −Fruitlet density maps to improve orchard production

• −Fruit density maps to improve crop estimates

==> picture [204 x 177] intentionally omitted <==

==> picture [204 x 177] intentionally omitted <==

==> picture [225 x 355] intentionally omitted <==

==> picture [960 x 15] intentionally omitted <==

25

==> picture [216 x 126] intentionally omitted <==

Sustainability Measured our carbon footprint for 2019

e 22,000 tonnes of CO2

Direct energy use 5,485 tonnes Product emmisions 25% 7,579 tonnes 34% Refrigerants & fuel Fertiliser Imported energy & compost 3,973 tonnes 18% Transport Electricity 4,995 tonnes 23%

189 grams per kilo of kiwifruit handled

==> picture [258 x 204] intentionally omitted <==

==> picture [960 x 15] intentionally omitted <==

Baseline independently verified

26

Understanding our carbon footprint

What are our key contributors?

==> picture [136 x 104] intentionally omitted <==

REFRIGERANTS

==> picture [131 x 80] intentionally omitted <==

FERTILISER & COMPOST

==> picture [231 x 416] intentionally omitted <==

==> picture [106 x 139] intentionally omitted <==

==> picture [84 x 118] intentionally omitted <==

ELECTRICITY

FUEL & TRANSPORT

==> picture [322 x 98] intentionally omitted <==

FREIGHT

==> picture [960 x 15] intentionally omitted <==

27

==> picture [566 x 211] intentionally omitted <==

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

Questions
----- End of picture text -----

==> picture [50 x 32] intentionally omitted <==

==> picture [960 x 15] intentionally omitted <==

28

==> picture [204 x 141] intentionally omitted <==

seeka.co.nz