SELECT HARVESTS LIMITED — AGM Information 2016

Nov 24, 2016

Select Harvests Limited (“SHV”) 2016 Annual General Meeting Growing Together 25 November 2016

Disclaimer & Basis of Preparation

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 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.

2

Michael Iwaniw

Chairman

3

Select Harvests Board

 Michael Iwaniw, Chairman, Appointed Chairman November 2011, standing for re-election

 Fred Grimwade, Non-Executive Director, Appointed July 2010

• Paul Riordan, Non-Executive Director, Appointed October 2012

• Ross Herron, Non-Executive Director, Appointed January 2005, retiring

• Michael Carroll, Non-Executive Director, Appointed March 2009

• Nicki Anderson, Non-Executive Director, Appointed January 2016, standing for re-election

• Paul Thompson, Managing Director, Appointed July 2012

4

Agenda

• 2016 Business Highlights

• 5 Year Business Performance

• Strategy

• Environment Sustainability and Governance

• Business Environment & Performance

• Almond Division

• Food Division

• Major Projects

• • Key Take-Outs

5

2016 Business Highlights

• Net Profit after Tax (NPAT) – 2[nd] highest ever

• Reported NPAT $33.8m (FY15 $56.8m)

• Underlying NPAT $27.9m (FY15 $59.4m)

• Operating cash flow $92.9m (FY15 $30.4m)

• Underlying EBIT $41.3m (FY15 EBIT $89.6m)

• Food Division EBIT $10.3m (FY15 $6.8m)

• Net Debt $67.3m (including lease liabilities) - Gearing (Net Debt to Equity) 23%

• Earnings per Share (EPS)

• Reported 46.7 cents per share (FY15 82.9 cps)

• Underlying 38.5 cents per share (FY15 86.8 cps)

• Dividend - Final Dividend (Franked) 25 cents per share - total FY16 dividend 46 cents per share (FY15 50cps)

Strong performance & cash generation in challenging conditions – validates SHV’s robust business model

6

5 Year Business Performance

Underlying NPAT (A$ million)

Planted/Bearing Almond Orchards (acres)*

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59.4
27.9
22.9 21.6
9.5
FY12 FY13 FY14 FY15 FY16
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Food Division EBIT (A$ million)

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Planted Acres Bearing Acres
16,521
13,311 13,824
11,943 12,319
10,022 6,689
8,804 8,804 9,295 9,443 Ha
5,597 4,987
3,564 3,564 4,057Ha 3,763 5,389Ha 3,823 Ha 4,835Ha Ha
Ha Ha Ha Ha
FY12 FY13 FY14 FY15 FY16
Planted acres as of August End
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Gearing - % (Net Debt/Equity)

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10.3
6.8
6.0
5.5 5.6
FY12 FY13 FY14 FY15 FY16
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54.0%
49.6%
41.7% 40.2%
23.1%
FY12 FY13 FY14 FY15 FY16
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Strong base: profitability, solid balance sheet & future growth from Almond and Food Divisions

7

Strategy

1. CONTROL CRITICAL MASS Secure the critical mass of nuts needed to maximize OF ALMONDS profitability and leverage the global almond opportunity.

2. IMPROVE YIELD & CROP Improve yield and overall crop value by perfecting on-farm VALUE and farm to factory practices . 3. BE BEST IN CLASS SUPPLY Continuously improve our supply chain, achieving high CHAIN quality, low cost and optimum capital utilisation.

4. INVEST IN INDUSTRIAL & Allocate resources to leverage our trading skills and grow TRADING DIVISION sales in the industrial channel .

5. STRENGTHEN & GROW Commit funds and develop structure to generate domestic and export growth for the packaged food business PACKAGED FOOD BUSINESS delivering sustainable returns above the cost of capital . 6. FIX OUR SYSTEMS & Develop the business systems and processes required to be PROCESSES a global industry leader . 7. NON-ORGANIC GROWTH Acquire businesses in related categories leveraging existing capabilities that are EPS accretive and deliver sustainable returns above our cost of capital. 8. ENGAGE WITH OUR PEOPLE Engage with investors and our industry while developing the & OUR STAKEHOLDERS team required to be a global industry leader.

We have a clear strategy – execution has delivered growth and productivity

8

Environment Sustainability & Governance

■ Environment & Sustainability

• Zero environmental breaches

• Water - Conserve, recycle, save. Improve efficiency of water distribution

• Energy - Project H2E reduces carbon footprint by 27%. Commissioned first off-grid solar power farm hub

• Bees - active in bee community/conferences/insight sharing. Plant forage crop to assist bee health

■ People & Diversity

• 43% of employees from a culturally diverse background

• 3% increase in female participation levels - females represent 30% of the workforce

• First female was appointed to Board and 2 new females on the senior executive

• Committed to fair and ethical work practices

• Diversity Committee - comprises employees from across all functions of the business

Creating long term value for shareholders, employees, customers, consumers and communities

9

Acknowledgement – Ross Herron

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Significant contribution to the company across his 11 years of service

10

Paul Thompson Managing Director

11

2016 Business Environment

• Underlying NPAT $27.9 million - 2nd highest ever

• Cash generation - generated record operating cash flow

• Strong balance sheet underpins growth - balance sheet secure

• Business environment - Almond price & currency improving

• Growth on track - Almond greenfield planting

• Cost out and capacity - Project H2E and Project Parboil

• Food Division turn around - Both Industrial and Branded strategy creating value

• Tree Health - improving as high performance orchard program gains traction

• Safety - LTIFR down 29%, MTIFR up significantly, HIFR up 436%

Generated cash, invested in productivity & future growth

12

5 Year Business Performance

Food Division - Export Sales (A$ million)

Growing Cost per Kg (A$/Kg)

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18.9
15.4
13.5
8.8
5.4
FY12 FY13 FY14 FY15 FY16
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11,943 12,319
9,295 9,443
8,804
FY12 FY13 FY14 FY15 FY16
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Harvest Volume (MT)

SHV Average Almond Price (A$/kg)

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14,500 14,200
12,000
10,500
5,830
FY12 FY13 FY14 FY15 FY16
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11.45
8.50
8.08
6.38
5.08
FY12 FY13 FY14 FY15 FY16
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FY16 was the second best financial performance in the company’s history

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Almond Division

Horticulture

• Volume: FY16 crop volume 14,200 tonnes (FY15 14,500 tonnes)

• Night harvest and favourable conditions resulted in faster harvest

• Tree health - continues to improve as nutrient program takes effect

• Greenfield plant out - 844 HA (2,084 acres with First State Super - “FSS”) completed in July 2016

Processing

• Hulling & shelling complete mid-August

• Dryness of crop resulted in lower productivity in processing

Assets Sales and Leases

• Sold almond orchards and greenfield development land to FSS for $65.4M plus agreement to fund greenfield development

• FSS acquired 2 additional properties for SHV to lease & develop greenfield plantings 405HA (1,000 acres )

• Sold WA assets

Solid growth base in place, delivering key strategic platform

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Significant Volume Growth

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Today 74% of orchards are cash generative

15

Global Market Update

Demand

• China and Indian demand strong. US demand is starting to improve with current prices stimulating demand.

• 2016 US crop is being shipped at record rates

• October 2016 shipments - 236 million pounds - highest ever (prev. highest Oct 2013)

• October YTD committed shipments - up 32% (587 million lbs vs 446 million lbs)

• Over 247 new products containing almonds were launched in Australia last year

• Almond milk is now available in every Starbucks store globally

Supply

• US Market 2016 crop - 2.1 Bn pounds (up 10% v last year)

• 22% of US orchard is more than 20 years old - retirement will impact short-medium term production capacity

• Australian crop up, Spanish crop down

• US Drought continues to impact Southern regions of Californian industry

• Australia, US and Spain looking to increase plantings

Australian water supply assured – Spanish & US dependant on winter rains & further drought relief

16

2017 SHV Crop Update

Crop

• Sufficient chill hours between seasons

• Good bloom

• Isolated storms and hail in SA - some nut loss and equipment damage

• Weather outlook - average rainfall, slightly higher temperature

• SHV 2017 Crop estimate between 15,500 & 16,000 tonnes

Market

• Current market pricing AS$7.50-8.00/kg

• 17% of estimated 2017 crop has been presold within this range

Geographic diversification drives production reliability

17

Food Division

Revenue

• Revenue of A$161.8 million was up 16.6% (FY15 A$138.8 million)

• Industrial sales - up 17%

• Branded Consumer sales - up 10%

• Export - Continued to grow in both divisions

• Record Lucky Cooking Market share - July 2016 MAT 42.3 % vs 40.1% last year MAT

Margin

• Improved sales mix driven margin improvement

• Industrial sales - Aligning to key regional industrial customers has delivered growth

• New Product Development (NPD) represent 13% of sales

• Trading - Astute trading in volatile market has delivered profit gains

Strong performance – ahead of strategy

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Major Projects

Greenfield Development

• On plan to budget

• Funding model delivering – 844HA (2,084 acres) planted out

• Greenfield plantings displaying excellent tree health

Project H2E - Biomass Electricity Cogeneration Facility

• Delay to the installation and commissioning of key equipment

• Commissioning now estimated to be Q1 FY2018

• No material change to FY2017 financial results

Project Parboil - Almond Value Added Facility

• Small delay in delivery of equipment and installation

• Commissioning now estimated to be Q3 FY2017

• No material impact to FY2017 results

All projects remain value accretive and deliver strategic benefits

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Key Take Outs

■ Almond strategy is in place to fund and grow volume by 63% in 2025

■ Actively looking to further invest in mature assets

■ Orchard health is excellent and 2017 crop estimate is 15,500- 16,000 MT

■ Cost competitive producer position is dependent on our investment in productivity

• High performance horticultural program will continue to improve tree health and yields

■ Growing industrial export business, the Almond value-adding facility will be the foundation

■ Consumer business growth means investing in new product development, brands & high growth export channel to deliver margin improvement, plus value accretive acquisitions

■ We will maintain a strong balance sheet

■ Zero Harm remains number one priority

SHV Almond & Food Divisions are both well placed to take advantage of global demand

20

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 found on the		Select Harvests website - www.selectharvests.com.au

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Annual General Meeting 25 November 2016

Consideration of The Financial Statements & Reports

22

Resolution #1: Remuneration Report

23

Resolution #1: Remuneration Report

For:	28,788,063
Against:	454,029
Open-Usable:	846,083

24

Resolution #2(a): Election of Michael Iwaniw

25

Resolution #2(a): Election of Michael Iwaniw

For:	29,248,378
Against:	79,070
Open-Usable:	863,742

26

Resolution #2(b): Election of Nicki Anderson

27

Resolution #2(b): Election of Nicki Anderson

For:	29,195,868
Against:	130,026
Open-Usable:	871,307

28

Discussion

29

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 found on the		Select Harvests website - www.selectharvests.com.au

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Select Harvests - Financial History

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 SHV Historical Summary Units*	2016
Total Sales (A$M) 217.9 229.5 224.7 248.6 238.4 248.3 251.3 191.1 188.1 223.5 EBIT (A$M) 38.4 40.5 27.1 26.8 26.0 15.4 19.6 37.7 31.3 89.6 EBIT Margin (EBIT/Sales - %) (%) 17.6% 17.6% 12.1% 10.8% 10.9% 6.2% 7.8% 19.7% 16.6% 40.1% PBT (A$M) 37.9 40.0 25.4 23.0 23.6 12.0 13.4 32.7 26.8 84.3 NPAT (A$M) 26.5 28.1 18.1 16.7 17.3 8.9 9.5 22.9 21.6 59.4 Issued Shares No. of Shares 39.7 38.7 39.0 39.5 39.8 56.2 56.8 57.5 58.0 71.4 Earnings Per Share (AUD Cents per Share) 67.1 71.0 46.7 42.6 43.3 17.0 16.8 40.1 37.5 86.8 Dividend per Share (AUD Cents per Share) 53.0 57.0 45.0 12.0 21.0 13.0 8.0 12.0 20.0 50.0 Payout Ratio (%) 80.0% 80.0% 96.7% 28.2% 48.5% 76.5% 47.6% 29.9% 53.3% 57.6% Net Tangible Assets per Share (A$/Share) 1.83 1.57 1.41 1.56 1.87 2.17 2.19 2.14 2.38 3.35 Net Interest Cover (times) 82.3 75.8 15.6 7.1 10.7 4.5 3.2 7.5 7.0 16.9 Net Debt (A$M) 1.3 1.6 46.8 52.4 45.0 73.1 66.8 79.3 94.8 115.6 Shareholder Equity (A$M) 101.5 95.5 94.1 100.9 113.6 168.8 160.3 159.5 175.4 287.4 Net Debt to Equity Ratio (%) 1.3% 1.7% 49.7% 51.9% 39.6% 43.3% 41.7% 49.7% 54.1% 40.2% Share Price (A$/Share) 13.02 11.60 6.00 2.16 3.46 1.84 2.40 3.90 5.14 11.00 Market Capitalisation (A$M) 517.0 449.4 234.1 85.4 137.6 103.5 120.0 224.3 298.1 785.4 P/E Ratio 19.5 16.0 12.9 5.1 8.0 11.6 12.6 9.8 13.8 13.2	285.9
	41.3
	14.4%
	35.8
	27.9
	72.9
	38.5
	46.0
	119.5%
	3.22
	7.5
	67.3
	290.9
	23.1%
	$6.74
	491.5
	17.6

• 2014 figures have been rebased according to early adoption of Accounting Standards, AASB 116, Property, Plant and Equipment, and AASB 141, Agriculture, impacting “bearer plants”. 2011-2016 figures represent underlying earnings .

Source: Company Data

31

Understanding FY16 Result

Reported FY16 Net Profit after Tax (NPAT)	$33.8m
Impact of non-recurring items	$5.9m
■Gains on Asset Sales during the Period*

Underlying FY16 Net Profit after Tax (NPAT) $27.9m

*** Gains on Asset Sales during the Period**

3 properties sold to First State Super (Sale & Leaseback)

Western Australian property sold for $9.5 million

Operating profits boosted by asset sales

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Income Statement

Financial Result	FY15	FY16
	($m)	($m)
Reported Result
EBIT - Reported	85.9	49.8
Interest	(5.3)	(5.5)
NPBT	80.5	44.3
Tax Expense	(23.7)	(10.5)
NPAT - Reported	56.8	33.8
Underlying Result
EBIT – Underlying	89.6	41.3
Interest	(5.3)	(5.5)
NPBT	84.3	35.8
Tax Expense	(24.9)	(7.9)
NPAT -Underlying	59.4	27.9

■ FY16 Underlying EBIT $41.3m (FY15 $89.6m)

■ Almond Division Underlying EBIT $36.1m (FY15 $87.5m)

• Strong performance in challenging market

• 2016 crop key drivers - 14,200 tonnes & A$8.08/kg inc. AUD currency 6% stronger

Risk mitigation & productivity

• Harvest and processing completed significantly earlier

■ Food Division Underlying EBIT $10.3m (FY15 $6.8m)

• Industrial sales up 17% (last year 28%)

• Improved sales mix towards branded products

• Improved price management and cost control

■ Underlying NPAT down 53% to $27.9m (FY15 $59.4m)

Strong result in challenging market

33

Balance Sheet

Year Ending Balance Sheet	Jun-15	Jun-16
	($m)	($m)
Current Assets excl. Cash	207.5	154.1
Cash	0.3	1.4
Non-Current Assets	280.1	294.3
Total Assets	487.9	449.8
Current Liabilities (excl. Borrowings)	40.8	51.2
Borrowings	110	68.7
Non-Current Liabilities (excl. Borrowings)	49.7	39.0
Total Liabilities	200.5	158.9
Total Equity	287.4	290.9
Net Debt	115.6	67.3
Net Debt/Equity	40.2%	23.1%

■ Net Debt $67.3m (FY15 $115.6m)

includes finance lease commitments of $41.8m

■ Gearing (Net debt/equity) 23.1%

■ Working capital reduction driven by 2015 crop sell through

Prudent balance sheet to support growth strategy throughout the business cycle

34

Cash Flow

Cash Flow	FY15 ($m)	FY16 ($m)
EBITDA	96.4	62.4
Change in Working Capital	(61.0)	35.4
Net Interest	(5.0)	(4.9)
Cash flow from operating activities	30.4	92.9
Investing cash flows	(99.9)	(47.8)
Proceeds from asset sales	-	73.2
Increase/(decrease) in Debt	5.8	(84.8)
Increase in Equity	64.7	-
Dividends Paid	(10.1)	(31.9)
Net (Decrease)/Increase in Cash/Cash Equivalents	(9.1)	1.6

■ Decreased working capital due to 2015 crop sales

■ FY16 Investing cash flows driven by:

• Orchard acquisitions $5.3m (FY15 $54.6m) Investment in cogen, new orchards in NSW, additional harvest and farm equipment and irrigation upgrades $28.6m

• Water $9.5m

• Tree Development $4.4m

■ FY16 Investing cash flows and Debt reduction funded by:

• Proceeds from asset sales $73.2m (sale and leaseback and WA land sale)

■ Capex - FY17

• Complete Projects – H2E(Cogen), Parboil (ValueAdded Almond production facility)

• Continued upgrade of irrigation infrastructure

• Investment in growth phase of younger trees

Record operating cash flow

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Almond Orchards – Our productive foundation

• Geographic diversity limits exposure to: − Weather

• − Disease spread

• − Insect infestation

Enables sequential progression of harvest period across regions: − Better farm equipment utilisation − Better processing utilisation − Better labour utilisation

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Secure access to diverse water sources:

• River Water

• − Aquifers

Positions the company to maximise harvest volume & reduce variance.

Building world class properties and a globally competitive low cost business.

Australia’s 2[nd] largest & most geographically diverse almond producer – 16,521 planted acres

Growth – 1,000 acres to be planted in July 2017 & 2018 – Funded by 3[rd] party

36

Select Harvests – Orchard Profile

Select Harvests Planted Under Development Total Planted	Select Harvests Planted Under Development Total Planted	Select Harvests Planted Under Development Total Planted	Select Harvests Planted Under Development Total Planted
Almond orchard portfolio (as at 30 June 2016) (as at 30 June 2016) (as at 26 August 2016)
Acres Hectares Acres Hectares Acres Hectares
Central region Company Owned Leased	3,852 1,559 1,481 599	310 125 1,443 584	4,162 1,684 2,924 1,183
Total Central	5,333 2,158	1,753 709	7,086 2,868
Northern Region Company Owned Leased	1,691 684 3,017 1,221	107 43	1,798 728 3,017 1,221
Total Northern	4,708 1,905		4,815 1,949
Southern Region Company Owned Leased	1,574 637 2,405 973	641 259	1,574 637 3,046 1,233
Total Southern	3,979 1,610	641 259	4,620 1,870
Total Company Owned Leased	7,117 2,880 6,903 2,794	417 169 2,084 843	7,534 3,049 8,987 3,637
Total	14,020 5,674	2,501 1,012	16,521 6,687

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Select Harvests – Horticultural Costs

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Select Harvests – Orchard Age Profile

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74% of current planted acres are cash generative
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Significant growth & improvement occurred in SHV orchard portfolio in recent years - acquisition, replants, greenfields

39

Almond Market Outlook – US Shipments 2015/16

	2014/15 2015/16 (million lbs) (million lbs) US Export Shipm	Growth (%) ents	2014/15 2015/16 Growth 2014/15 2015/16 (million lbs) (million lbs) (%) (million lbs) (million lbs) US Domestic Shipments Total US Almond S	Growth (%) hipments
Last 12 months	1,104.3 1,371.4	24%	631.3 615.2 (3%) 1,734.9 1,986.7	15%
Last 9 months	848.0 1,102.9	30%	477.9 478.6 0% 1,325.9 1,581.5	19%
Last 6 months	531.0 762.9	44%	313.6 334.9 7% 844.6 1,097.8	30%
Last 3 months	276.7 430.0	55%	155.1 177.1 14% 431.7 607.1	41%

Source: Almond Board of California, October 2016 Position Report, 8 November 2016

Source: Almond Board of California Position Reports

Increasing US shipments relative to prior periods are gaining pace

40

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 found on the		Select Harvests website - www.selectharvests.com.au

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