SELECT HARVESTS LIMITED — Interim / Quarterly Report 2012

Feb 28, 2012

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Select Harvests

1H12 Results 29th February 2012

Michael Iwaniw, Chairman Paul Chambers, Chief Financial Officer

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Agenda

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Results highlights

Financial performance Operational performance Industry fundamentals Strategy & outlook

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Results Highlights

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• First-half reported EBIT $9.4m, (1H11:$13.5m)

• • First-half adjusted EBIT $10,5m, (1H11$ 7.7m))

• FINANCIAL •

• PERFORMANCE First-half reported NPAT $6.0m, (1H11:$10.1m) • First-half adjusted NPAT $6.8m, (1H11$5.5m)

• • 5c interim fully franked dividend

• • Crop progressing well: • Full water allocations

• • Company Orchards crop estimate 7,300 metric tonnes

• •

• OPERATIONAL Harvest underway, 30% FY12 crop sold

• PERFORMANCE • Improved performance in Food Division, with focus on optimising almond sales, leveraging core brands and working capital reduction in 2H12.

• • Focus on realigning cost structures in line with changes to the business

• • Strong demand globally driven by China and India

• • Record California shipments underpins firmer almond price

• STRONG FUNDAMENTALS • AUD exchange rate continues to present a major challenge impacting returns across the Australian Almond industry

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Agenda

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Results highlights

Financial performance

Operational performance Industry fundamentals Strategy & outlook

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Income Statement

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Reported Adjusted Change	Reported Adjusted Change	Reported Adjusted Change	Reported Adjusted Change	Reported Adjusted Change	Reported Adjusted Change
(A$m) 1H11 1H12 1H11 1H12 %
Sales revenue	132.7	129.8	132.7	129.8
EBIT
Managed Orchards	6.0	5.4	6.0	5.4
Company Orchards	5.8	2.5	-	3.5
Almond Division	11.8	7.9	6.0	8.9	+48%
Food Division	3.5	3.5	3.5	3.5
Corporate	(1.8)	(2.0)	(1.8)	(2.0)
EBIT	13.5	9.4	7.7	10.5	+36%
Interest Expense	(1.6)	(3.2)	(1.6)	(3.2)
Net Profit Before Tax	11.9	6.2	6.1	7.3	+19%
Tax Expense	(1.8)	(0.2)	(0.6)	(0.5)
Net Profit After Tax	10.1	6.0	5.5	6.8	+23%

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Crop forecasts and reporting cycle

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Prior year crop
finalised
Half-year end
Half-year results
Full-year results
announcement
Full-year end announcement Initial crop estimate
Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec
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Almond harvest

Almond Crop Processed

Almond Crop sales program

…continuation of prior year sales program

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Adjustments

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(A$ ms) 1H11 1H12	(A$ ms) 1H11 1H12	(A$ ms) 1H11 1H12
EBIT	13.5	9.4
Lower realisation on Company Orchards 2011 crop	(3.8)	1.1
Discount on acquisition of orchards acquired during the period	(2.0)	-
Adjusted EBIT	7.7	10.5

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Balance sheet

(A$m) 30 June 2011 31 Dec 2011	(A$m) 30 June 2011 31 Dec 2011	(A$m) 30 June 2011 31 Dec 2011
Current Assets excl. Cash	80.6	80.5
Cash	7.4	0.3
Non Current Assets	214.4	232.6
Total Assets	302.3	313.4
Current Liabilities (excl. Borrowings)	27.5	32.8
Borrowings	80.5	82.7
Non Current Liabilities (excl. Borrowings)	25.6	24.8
Total Liabilities	133.6	140.3
Total Equity	168.7	173.1
Net Debt	73.1	82.4
Net Debt /Equity	43.3%	47.6%
NTA Per Share	$2.17	$2.24
NTA Per Share (adjusted for water rights)	$2.47	$2.56

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 Investment in

WA/acquisitions, tree development and working capital

 Net debt and Gearing in line with target

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Cash flow

(A$m) 1H11 1H12	(A$m) 1H11 1H12	(A$m) 1H11 1H12
EBITDA (excluding discount on acquisition)	13.9*	9.2
Change in Working Capital	(17.1)	4.1
Taxes Received	1.5	-
Net Interest	(1.6)	(1.6)
Cash flow from operating activities	(3.3)	11.7
Investing cash flows	(22.9)	(19.7)
Proceeds from capital raising	45.1	-
Change in Debt	(23.2)	3.7
Dividends Paid	(4.4)	(1.5)
Net Decrease in Cash and Cash Equivalents	(8.7)	(5.8)

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• Positive EBITDA/cash conversion

• Working capital plateau

• No Tax (R and D, accelerated depreciation)

• Capital spend now largely sunk

• Tree development WA to come

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Agenda

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Results highlights

Financial performance

Operational performance

Industry fundamentals Strategy & outlook

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Almond division: harvest update

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• Current crop estimate is for 2012 to be higher than 2011 crop

• More accurate estimate will be possible once harvest has been completed

• Almonds have already been processed and packaged for sale to domestic and international markets

• 30% of 2012 Company Orchards crop has been sold

• Recent rainfall in Victoria and New South Wales has not had material impact on crop to date

• Pleased to have made strong start to 2012 harvest with 30% of crop already harvested

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Almond division: Company Orchards

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• Reported EBIT 1H12:$2.5m (1H11: $5.8m)

• Adjusted EBIT 1H12: $3.5m (1H11: $ -)

• FY12 crop estimated ~7,300mt (FY11: 4,040mt)

• Estimated price for 2012 crop up 10% on 2011 crop price

• Crop estimate reflects expansion of Company Orchards portfolio and increasing maturity profile

• Stage 2 planting in WA completed

• WA first crop expected 2013

• Company orchards projected to produce 14,000mt at full maturity

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Almond division: Managed Orchards

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• 1H12 EBIT: $5.5m (1H11: $6.0m)

• Full water allocations in place, tree health good driving uplift in volumes

• Increased processing and marketing volumes anticipated in FY12

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Food division

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• 1H12 EBIT $3.5m (1H11: $3.5m)

• Improved performance against 2H11

• Full operational and product review completed

• Consolidate business

• Focus on almond sales and core brands

• Reduced cost base and improved efficiencies

• Reduced working capital usage

• Improved returns

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Agenda

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Results highlights

Financial performance

Operational performance

Industry fundamentals

Strategy & outlook

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Almond fundamentals strong

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• Supply and demand have grown at 8% CAGR over past decade

• Current demand growth trending above growth rate at 11%

• Average supply growth cannot be maintained due to slow down in recent plantings

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Demand Shift towards China and India

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 Record January shipments + 28% driven by demand from China and India

US shipments by destination

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Eastern
Middle Eastern Europe
Europe
East/Africa 3% Middle 3%
6% East/Africa
11%
Americas
Asia Pacific
Americas 34%
13%
37%
Asia Pacific
24%
Western
Western
Europe
Europe 28%
41%
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Eastern Europe
Middle 3%
East/Africa
12% Americas
30%
Asia Pacific
32%
Western Europe
23%
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2005 crop

2010 crop

2011 crop YTD

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Global almond production

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2000

2010

2015

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Australia Australia Australia
2% 5% 9%
Others
Others Others
22%
14% 12%
USA USA USA
76% 81% 79%
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Almond price

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Agenda

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Results highlights

Financial performance Operational performance

Industry fundamentals

Strategy & outlook

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Company Orchards strategy on-track

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• Expansion of Company Orchards delivering increased volumes

• New South Wales and Victorian orchards on track for significant volume uplift

• Maturity profile

• Growing conditions

• Water allocations

• Expanded footprint enables access to additional third party processing volumes

• Stage 2 planting of 2,000 acres in Western Australia now completed,

• Stage 1 maturing well with first crop expected 2013, reaching full maturity 2017

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Stage 1 orchards, Dandaragan Plateau, WA

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Key focus areas for 2H12

• Ongoing review cost structure

• reduce working capital

• strengthen balance sheet

• Food Division restructure

• realign cost base across the business

• Investment in existing Company Orchards

• improved yields

• water allocations

• tree health

• Securing processing volumes

• Remain alive to opportunities to expand Company Orchards

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Integrated business model

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Projected crop profile

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• Post 2013 Select Harvests will manage 25% of Australia’s almond acreage

• Equates to 2% of global production

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Projections based on standard industry yields
50,000
40,000
30,000
20,000
10,000
0
Tonnes
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Standard Industry Yields – standard yield per acre applied by Almond Board of Australia to project annual industry crops

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Select Harvests’ growth drivers

• Global food security

• Strong world consumption growth

• Plateauing global supply

• Upside in international almond price

• Increasing nut consumption in Australia and internationally

• Increased future tonnages: yield, maturity of trees, increased acreage

• Increased processing & marketing volumes:

• Australian almond crop to double over next 4 years

• Select Harvests capacity to service that demand

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• USD/AUD exchange rate

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Outlook

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• Outlook for the remainder of the year positive

• Higher crop volumes anticipated for 2012 crop across Company Orchards

• Firm almond price and sound fundamentals

• Well placed to meet growing global demand for almonds

• Strong Australian dollar continues to present challenges

• Assuming current crop and almond price estimates hold through the remaining harvest, processing and selling periods the Company expects an improved EBIT in the second half compared to the first half

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Questions

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