SELECT HARVESTS LIMITED — AGM Information 2012

Nov 19, 2012

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Select Harvests Limited (“SHV”)

Annual General Meeting Paul Thompson, Managing Director 20 November 2012

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Disclaimer

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Disclaimer & Basis of Preparation

This presentation is provided for information purposes only. The information contained in this presentation is not intended to be relied upon as advice to investors and does not take into account the investment objectives, financial situation or needs of any particular investor. Investors should consider their own individual investment and financial circumstances in relation to any investment decision.

Certain statements contained in this presentation may constitute forward-looking statements or statements about future matters that are based upon information known and assumptions made as of the date of this presentation. These statements are subject to risks and uncertainties. Actual results may differ materially from any future results or performance expressed, predicted or implied by the statements contained in this presentation.

Underlying EBIT and Underlying NPAT are non-IFRS measures that reflect, in the opinion of the Directors, the ongoing operating activities of Select Harvests Ltd in a way that appropriately presents its underlying performance. The non-IFRS underlying profit measures exclude restructuring expenses, asset impairments and asset write-downs

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Agenda

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First Impressions

Financial Performance

The Path Forward

Almond Division

Food Division New Structure & Team

Outlook

Appendices

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First Impressions

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• Industry

• Almonds are a global growth industry underpinned by outstanding fundamentals

• Natural barrier to supply entry through long lead times to mature production (7 years)

• Australian almond industry has experienced challenges outside of its control

• Business

• Quality assets with global scale (Orchards, Carina West Processing Facility, Brands)

• Integrated & diversified model offers stable platform for growth

• Talent & knowledge is within the business

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Financial Performance – FY12

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• Reported FY12 EBIT (loss $2.5M)

• Underlying FY12 EBIT $19.6M (up 27% vs Underlying FY11 EBIT $15.4M).

• Reported FY12 NPAT (loss $4.5M) (vs Reported FY11 NPAT $17.7M)

• Underlying FY12 NPAT $9.5M (up 6.7% vs Underlying FY11 NPAT $8.9M)

• Reported Earnings per Share (“EPS”) (loss 7.9 cps)

• Underlying EPS 16.8 cents per share (“cps”)

• Final Dividend 3 cps (full year dividend totals 8 cps)

• Strong operating cash flow $22M

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SHV Path Forward – 3 Phases

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Growth Business Improvement Consolidation	Growth Business Improvement Consolidation	Growth Business Improvement Consolidation	Growth Business Improvement Consolidation	Growth Business Improvement Consolidation
	Restore the Basics	Build foundations One Select	Expand and grow
	�Exit Olam �Improve farm practices yield & quality �Improve asset utilization �Reduce costs	�Improve returns in Food Div �Acquire almond orchards at attractive values �Bring in new investment �Leverage investment in WA orchard assets	�Leverage core competencies �Orchard Industry top quartile �Innovate & grow brands �Explore new categories �Expand exports
6 �Food Business Performance Improvement (“PI”) Program �Realign structure & culture	�Food Business Performance Improvement (“PI”) Program	�Realign structure & culture

Almond Division

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Top 5 Priorities

1. Optimise 2013 Crop Yield & Quality - Individual farm plans based on crop set

2. Horticultural Review Major Recommendations - Agree Key Activities & Performance Indicators

3. Improve Return per KG - Benchmarking

4. Secure additional almond volume for Carina West Processing Facility - Underway

5. Develop funding mechanism to secure long term, capital efficient, almond supply - Underway

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Engine room for SHV performance

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WA Review Process

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Overview

• SHV’s WA orchards located in Central West region, on Dandaragan Plateau

• Current 3,949 acres planted

• Implementation issues have resulted in $20m write down

• Horticultural Review - completed

• Economic review underway - due 1H CY2013

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Food Division

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Top 5 Priorities

1. Food quality, safety & hygiene initiatives (e.g. pasteuriser)

2. Optimising equipment efficiency on a prioritised payback hierarchy (e.g. 1 year payback)

3. Regain and strengthen customer/consumer trust post recall

4. Reduce operations and go to market costs - $1m opportunity

5. Improve people management & information processes - major impact is reduced working capital

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Recall

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• Voluntary precautionary recall of some Australian natural almond kernel products supplied to Woolworths

• Select potential identified source and additional precautionary recalls made

• Select maintains high standards of quality assurance:

• HACCP and SGF2000 accreditation

• Facilities regularly audited

• Extensive internal and external testing by third party laboratories

• Select is well progressed with plans to offer customers pasteurised almonds

• Impact of the recall has not materially impacted company profitability

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New Structure & Team

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Managing Director
(Paul Thompson )
GM Sales & Marketing Group Trading Manager
GM Horticulture GM Operations – Trading & Industrial CFO/Company Secretary HR Manager
– Consumer Sales
(Peter Ross) (Bruce van Twest) (Paul Chambers) (Tom Kite)
(Mark Eva) (Laurence Van Driel)
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Almond Price & Crop Update

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• US Crop

• USA 2012 Almond crop est. 1.9 billion pounds

• Down 200 million pounds on earlier projections (equivalent to total Australian & Spanish almond crop)

• SHV Crop Update

• Good almond blossom & pollination

• Weather conditions throughout have been good

• Current long term weather outlook is favourable

• Price

• US price is up 10-15% on 2011 price

• Highest price for last 5 years

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Why Select – 10 Reasons

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1. Industry - Excellent industry fundamentals/global supply & demand

2. Company - Building a replenished & balanced team (Board & Management)

3. Model – Integrated business model

4. Culture Improvement - One Select

5. Performance Excellence - Initiatives have commenced, but significant work still to do

6. Key Business Drivers - Volume, Quality, price & currency

7. Tree Maturity – Significant proportion of trees are at or near maturity

8. Capital Management - Opportunity to build a more capital efficient structure to capture growth & secure almonds

9. Good position in industry

10. Select is the only way for an investor get a pure-play listed company exposure to the global

11. fundamentals of almonds in an integrated and diversified manner

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What we are building

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• A strong and trustworthy company that looks after stakeholder interests

• A business that can manage the dynamic agricultural cycle and can mitigate the inherent risks

• A company that responds to the challenges and learns from the experience

• A cash generating company that will be positioned to invest in growth in a growth industry

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Appendix

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Thank you

Please direct any queries to: Paul Thompson, Managing Director, +61 3 9474 3544 Paul Chambers, Chief Financial Officer, +61 3 9474 3544 Andrew Angus, Investor Relations, +61 402 823 757

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Select Harvests & The Almond Industry Value Chain

		Farming & Farm Management	Processing	Sales & Marketing
	Summary of Capability	17,151 acres (6,940 hectares “ha”)	Primary Processing 30KT Rbil Vi	Consumer, Foodservice & Idtil bi
		Diversified across Vic, NSW & WA	onvae c Value Added Processing Robinvale & Thomastown	nusra usnesses Global nut trader
	Key Attributes	Ownership 8,232 acres (3,331 ha) owned 4,498 acres (1,820 ha) leased 4,421 acres (1,789 ha) managed	Primary Hulling & Shelling Inshell bagging	Brands Lucky: No 1 Cooking Soland: No1 Health Food Sunsol: Snacking
		Geographic Diversity 8,674 acres (3,510 ha) VIC 4,528 acres (1,832 ha) NSW 3,949 acres (1,598ha) WA	Value Added Blanching Slicing Dicing Meal Pastes Roasting Blending	Renshaw: Industrial Customers Coles Woolworths Mars Unilever Export

Select Harvests is integrated from “paddock to consumer packet”

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SHV Financial History

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			2006	2007	2008	2009	2010	2011	2012
	SHV Historical Summary	Units
	Total Sales	($M)	217.9	229.5	224.7	248.6	238.4	248.3	246.8
	EBITDA	($M)
	EBIT	($M)	38.4	40.5	27.1	26.8	26.0	22.6	(2.5)
	EBIT Margin (EBIT/Sales-%)	(%)	17.6%	17.6%	12.1%	10.8%	10.9%	9.1%	(1.0%)
	PBT	($M)	37.9	40.0	25.4	23.0	23.6	18.5	(8.7)
	NPAT	($M)	26.5	28.1	18.1	16.7	17.3	17.7	(4.5)
	Issued Shares	No. of Shares	39.7	38.7	39.0	39.5	39.8	56.2	56.8
	Earnings Per Share	(Cents per Share)	67.1	71.0	46.7	42.6	43.3	33.7	(7.9)
	Dividend per Share	(Cents per Share)	53.0	57.0	45.0	12.0	21.0	13.0	8.0
	Payout Ratio	(%)	80.0%	80.0%	96.7%	28.2%	48.5%	38.6%	(101.3%)
	Net Tangible Assets per Share	($/Share)	1.83	1.57	1.41	1.56	1.87	2.17	2.19
	Net Interest Cover	(times)	82.3	75.8	15.6	7.1	10.7	6.7	(0.4)
	Net Debt	($M)
	Shareholder Equity	($M)	101.5	95.5	94.1	100.9	113.6	168.8	160.3
	Net Debt to Equity Ratio	(%)	1.3%	1.7%	49.7%	51.9%	39.6%	43.3%	41.7%
	Current Asset Ratio	(times)	1.82	1.32	0.87	0.79	1.44	1.96	1.42
	Share Price	($/Share)	13.02	11.60	6.00	2.16	3.46	1.84	1.30
	Market Capitalisation	($M)	517.0	449.4	234.1	85.4	137.6	103.5	73.9
	Share Price/NTA		7.1	7.4	4.3	1.4	1.9	0.8	0.6
	P/E Ratio		19.5	16.0	12.9	5.1	8.0	5.8	(16.4)

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